Amalgam Aquaculture Applications Ltd. v. Income Tax Officer and Amalgam Nutrients and Feeds Ltd. v. Income Tax Officer

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. Somarajan
Judgment Date: 2021-03-09
Court Decision / Holding: Crl.M.C.7481/2019 & Crl.MC.7484/2019 - Cr.M.Cs allowed; the complaints in CC 258/2017 and CC 259/2017 are quashed along with the further proceedings under the Income Tax Act.
Final Disposition: Petitions allowed; complaints quashed and Cr.MCs allowed accordingly; proceedings under Sec. 276C(2) not to continue in these circumstances.

Parties to the Case

Appellants / Petitioners

M/S. Amalgam Aquaculture Applications Ltd.
Abraham John Tharakan
Jani Uthup Chacko
Raju Mathew
Mathew Jose
M/S. Amalgam Nutrients and Feeds Ltd.
Keya Tharakan
Thekkey Kotiazath Venugopal

Respondents

Income Tax Officer, Corporate Ward 1(1), Kochi, Office of the Addl. Commissioner of Income Tax, Corporate Range-I, Kochi
State of Kerala, represented by Public Prosecutor, High Court of Kerala, Ernakulam

Legal Representation & Advocates

Counsels for Petitioners

• S. Rajeev
• K. K. DheerendraKrisnan
• V. Vinay
• D. Feroze
• K. Anand

Counsels for Respondents

• Jose Joseph, SC, for Income Tax
• E. C. Bineesh, Public Prosecutor
• Ramesh Chand, Public Prosecutor

Case Synopsis & Summary

The Kerala High Court, Ernakulam, on 9 March 2021, heard two Cr.MCs (Crl.MC.No.7481/2019 and Crl.MC.No.7484/2019) challenging the orders in CC 258/2017 and CC 259/2017 of the Additional Chief Judicial Magistrate (EO), Ernakulam. The petitioners include Amalgam Aquaculture Applications Ltd. and its directors (1–5) in the first matter, and Amalgam Nutrients and Feeds Ltd. and its directors (1–6) in the second, with the Income Tax Department and State as respondents. The core issue is cognizance under Section 276C(2) of the Income Tax Act for alleged failure to pay tax based on self-assessment. The court relied on the Apex Court’s Prem Dass v. Income Tax Officer (AIR 1999 SC 1079 = (1999) 5 SCC 241) to emphasize that mere non-payment of tax based on self- assessment does not automatically attract mens rea or cognizance for the offences under Sections 276C/277. The court also notes that the Kerala decision in G. Viswanathan v. Income Tax Officer (1987 ITR 103) is not good law. After examining the extracts from the Prem Dass ruling and the relevant statutory provisions, the court quashed the complaints and held that the criminal proceedings need not continue, allowing the Cr.MCs accordingly. The decision underscores a cautious approach to invoking criminal proceedings for non-payment arising from self-assessment and aligns with the cited Supreme Court authority.

Provisions of Law Cited

Section 276C(2) of the Income Tax ActSections 276C and 277 of the Income Tax Act

Legal Doctrines & Maxims

Conjoint reading of subsections (1) and (2) with the Explanation
Concealment of income or furnishing of inaccurate particulars of income is required to attract 276C/277 (doctrines)

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Prem Dass v. Income Tax Officer	AIR 1999 SC 1079 = (1999) 5 SCC 241	Positive	Apex Court authority relied upon to hold that mere non-payment of tax based on self-assessment does not attract cognizance under Sec. 276C(2); thus supports quashing.
G. Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar	1987 Vol. 167 ITR 103	Overruled	Court expressly states that the Viswanathan decision is not good law and has been overruled in this context.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.SOMARAJAN** **TUESDAY, THE 09TH DAY OF MARCH 2021 / 18TH PHALGUNA, 1942** **Crl.MC.No.7481 OF 2019(E)** **AGAINST THE ORDER/JUDGMENT IN CC 258/2017 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (EO),ERNAKULAM** **PETITIONERS/ACCUSED NO.1 TO 5:** - **1 M/S.AMALGAM AQUACULTURE APPLICATIONS LTD. PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003, REP. BY ITS MANAGING DIRECTOR AND PRINCIPAL OFFICER, ABRAHAM JOHN THARAKAN.** - **2 ABRAHAM JOHN THARAKAN. AGED 78 YEARS** - **S/O.MR.JOHN THARAKAN MANAGING DIRECTOR AND PRINCIPAL OFFICER, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** - **3 JANI UTHUP CHACKO AGED 74 YEARS** **S/O.CHIRAKAROTE CHACKO UTHUP, DIRECTOR, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** - **4 RAJU MATHEW** **DIRECTOR, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** - **5 MATHEW JOSE** **DIRECTOR, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** **BY ADVS. SRI.S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY SRI.D.FEROZE SRI.K.ANAND (A-1921)** Crl.MC.7481/2019 & Crl.MC.7484/2019 2 ## **RESPONDENTS/STATE/COMPLAINANT:** **1 INCOME TAX OFFICER, CORPORATE WARD 1(1), KOCHI, OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX , CORPORATE RANGE-I, KOCHI, 5TH FLOOR, C.R.BUILDING, I.S.PRESS ROAD, KOCHI-682018. 2 STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031. R1 BY ADV.SRI.JOSE JOSEPH, SC, FOR INCOME TAX R2 BY ADV.SRI.E.C.BINEESH, PUBLIC PROSECUTOR** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 09.03.2021, ALONG WITH CRL.MC.7484/2019(E), THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** 3 Crl.MC.7481/2019 & Crl.MC.7484/2019 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.SOMARAJAN** **TUESDAY, THE 09TH DAY OF MARCH 2021 / 18TH PHALGUNA, 1942** ## **Crl.MC.No.7484 OF 2019(E)** **AGAINST THE ORDER/JUDGMENT IN CC 259/2017 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (EO),ERNAKULAM** ## **PETITIONERS/ACCUSED NO.1 TO 6:** **1 M/S.AMALGAM NUTRIENTS AND FEEDS LTD. PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003, REP. BY ITS MANAGIANG DIRECTOR & PRINCIPAL OFFICER, KEYA THARAKAN, AGED 39 YEARS, D/O.ABRAHAM JOHN THARAKAN.** **2 KEYA THARAKAN AGED 41 YEARS D/O.SHRI ABRAHAM THARAKAN, MANAGING DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** **3 JANI UTHUP CHACKO AGED 74 YEARS S/O.CHIRAKAROTE CHACKO UTHUP, DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** **4 ABRAHAM JOHN THARAKAN AGED 78 YEARS S/O.MR.JOHN THARAKAN, DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** 4 Crl.MC.7481/2019 & Crl.MC.7484/2019 **5 THEKKEY KOTIAZHATH VENUGOPAL AGED 75 YEARS** **DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** **6 MATHEW JOSE AGED 75 YEARS DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003.** **BY ADVS. SRI.S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY SRI.D.FEROZE SRI.K.ANAND** ## **RESPONDENTS/STATE/COMPLAINANT:** **1 INCOME TAX OFFICER, CORPORATE WARD 1(1), KOCHI, OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX CORPORATE RANGE-I, KOCHI, 5TH FLOOR, C.R.BUILDING, I.S.PRESS ROAD, KOCHI-682018.** **2 STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031.** **R1 BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX R2 BY ADV. SRI. RAMESH CHAND, PUBLIC PROSECUTOR** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 09.03.2021, ALONG WITH CRL.MC.7481/2019(E), THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** Crl.MC.7481/2019 & Crl.MC.7484/2019 5 ## **ORDER** Following the legal position settled by the Apex Court in **Prem Dass v. Income Tax Officer [AIR 1999 SC 1079 = (1999) 5 SCC 241]** this Court in Crl.M.C.No.5669/2020 dated 11.02.2021 had laid down that a mere failure to pay the tax based on self assessment return will not attract the mischief under Section 276 C(2) of Income Tax Act and also laid down that the decision rendered by this Court in **G.Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar (1987 Vol. 167 ITR 103)** is not good law. The relevant portion of the judgment in Crl.M.C.No.5669/2020 is extracted below for reference: _“4. A mere perusal of the said provision would show that the Explanation was given after subsection(1) and (2) and not before subsection(2). It would prima facie_ Crl.MC.7481/2019 & Crl.MC.7484/2019 6 _show that the legislative intention is to make the Explanation applicable to both sub-section (1) and (2), otherwise, the Explanation would have been incorporated before sub-section (2). A conjoint reading of subsections (1) and (2) with clauses (i) to (iv) in the Explanation would show that the legislature never intended to exclude sub-section (2) from the operation of Explanation._ _5. Earlier, an issue regarding difference of opinion as to the estimate and non-payment of tax came up for consideration before the Apex Court in_ _**Prem Dass v. Income Tax**_ _**Officer [AIR 1999 SC 1079 = (1999) 5 SCC 241]** , and it was held that there should be concealment of income or furnishing of inaccurate particulars of income in order to attract Sections 276 C and 277 of the Income Tax Act .........”_ The issue involved in the instant case is with respect to the failure to pay tax based on a self assessment return and cognizance Crl.MC.7481/2019 & Crl.MC.7484/2019 7 taken thereof under Section 276 C(2) of the Income Tax Act. Hence the complaint and the further proceedings are hereby quashed. Crl.M.Cs. are allowed accordingly. **Sd/-** **P.SOMARAJAN JUDGE** SPV Crl.MC.7481/2019 & Crl.MC.7484/2019 8 ## **APPENDIX OF Crl.MC 7481/2019** ## **PETITIONERS' EXHIBITS:** ## **ANNEXURE I** **CERTIFIED COPY OF THE COMPLAINT ALONG WITH DOCUMENTS IN C.C.NO.258/2017 ON THE FILE OF THE ADDL. CHIEF JUDICIAL MAGISTRATE COURT (EO) ERNAKULAM.** ## **ANNEXURE II** **TRUE COPY OF THE JUDGMENT DATED 4.6.2019 IN WPC.NO.3278/19 PASSED BY THIS HON'BLE COURT.** ## **RESPONDENTS' EXHIBITS: NIL** **//TRUE COPY//** **PA TO JUDGE** Crl.MC.7481/2019 & Crl.MC.7484/2019 9 ## **APPENDIX OF Crl.MC 7484/2019** ## **PETITIONER'S/S EXHIBITS:** **ANNEXURE I CERTIFIED COPY OF THE COMPLAINT ALONG WITH DOCUMENTS IN C.C.NO.259/2017 ON THE FILE OF THE ADDL. CHIEF JUDICIAL MAGISTRATE COURT (EO) ERNAKULAM.** **ANNEXURE II TRUE COPY OF THE JUDGMENT DATED 4.6.2019 IN WPC.NO.3278/19 PASSED BY THIS HON'BLE COURT.** ## **RESPONDENTS' EXHIBITS: NIL** ## **//TRUE COPY//** **PA TO JUDGE**