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2018 (10) TMI 1964 - HC - Income TaxCompounding of offences punishable u/s 276B r.w.s.278B - admitted default in deposit of TDS - lapse of over 12 to 17 months - Proof of mens rea to deprive the State or to withhold public monies for private good - petitioner retained and misappropriated the monies for that period and illegally enjoyed the benefits therefrom - petitioner submits that upon the petitioner realising its mistake, on its own it paid all the monies into the Treasury - HELD THAT:- Court is not persuaded by the petitioner‟s arguments, because the monies belong to the Government, and the petitioner could not have held on it because it knew fully well of the imperative to deposit it as per statutory requirements. Instead, it misused the government monies for its private benefits. If it had discovered that it had to pay the monies after 6 months or 8 months or 12 months or 17 months or whenever the “so-called” realization dawned upon it, it should have explained the same to the Income Tax Department, prior to the issuance of the show-cause notice. It is only upon the petitioner‟s taking such action, its plea of bona fides may have been considered. There could be no bona fides when a petitioner is issued a show-cause notice after 4 or 5 years of such default. The Court would note that the monies were due in the Government Treasury in the year 2009, which was offered in the year 2011 or so. Income Tax Department noticed the anomaly in the refund of monies much later. If the petitioner raises the plea of financial inability as a constraint for not paying the collected TDS earlier on account of bankruptcy of his importers, then the submission implies that it surely was aware of its statutory liability to deposit the TDS with the Income Tax Department. The argument of absence of mens rea is untenable, in view of the conflicting pleas of inadvertent lapse and simultaneous financial hardship. Hence, a show-cause notice was issued on 28.07.2014. It was open to the petitioner to have intimated the Income Tax Authorities about his alleged lapse and the difficulties in recovering such monies from his importers, who had become bankrupt. Be that as it may, the bankruptcy of a foreign company has nothing to do with the TDS in India - the Court finds no infirmity in the aforesaid reasoning. There is no merit in the petitions. Accordingly, the petitions, alongwith pending applications, stand dismissed.
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