Mumbai-based businessman jailed for not filing I-T returns in time

MUMBAI: In probably the first such instance, the South Mumbai-based director of a jewellery company was on Wednesday convicted and sentenced to three months' rigorous (involving hard labour) imprisonment for deliberately not filing income tax returns for the assessment year 2014-15 within the due date despite repeated notices.
The Ballard Pier magistrate court held both the company, Ms Shah Time and Jewels Pvt Ltd and its director, Paresh C Shah, guilty. Special public prosecutor Amit Munde said a fine of Rs 5,000 was imposed on each entity.
The court refuted Shah's defence of "lack of knowledge" and that another director, who was responsible for filing returns, had deliberately not done so. The court found that director had resigned and did not hold the post at the time of filing returns for 2014-15.
It observed a conviction under provisions of the Income Tax Act was an extreme and exceptional resort and was warranted only when wilful failure to deposit the return was established beyond all reasonable doubt.
"In the present case, the accused received the notice, but no explanation was given despite repeatedly serving the notices. The explanation before the court is not at all acceptable," additional chief metropolitan magistrate R S Sarkale said. While Shah sought leniency stating this was his first offence and he had already paid the tax amount with interest and penalty, Munde said it could not be viewed lightly as despite being an educated person, Shah had not filed the return in time.
The court said while the maximum sentence was two years' imprisonment, Shah could be given the minimum sentence of three months since there were no allegations about the company being irregular in paying taxes except in this instance, The complaint was filed by the deputy commissioner of the Income Tax in February 2018.
The prosecution alleged the company did not file its return within the due date of November 30, 2014. The prosecution further submitted a show cause notice was issued on November 22, 2017 to the company as well as the director as to why sanction for their prosecution should not be given under the Income Tax Act. However, since both did not respond, the complaint filed.
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