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2021 (7) TMI 314 - HC - Income TaxOffence punishable under Section 276C(2) read with Section 278E of Income Tax Act - wilful attempt to evade payment of tax -Non-payment of remaining admitted tax liability - petitioners state that they have resigned way back in the month of November, 2018 and the Certificate of the Chartered Accountant dated 19.11.2019 along with necessary documents shows that the entire tax liability had been paid by the accused Company - assessee deposits/ paid self- assessment tax dues belatedly, after steps taken by the department - HELD THAT:- From the facts of the case it appears that Company had voluntarily declared its intention to pay tax and 80% of the tax was paid prior to the complaint. The Income Tax Department was instructed regarding the dues from the GST Department and there is no denial to the fact that the Income Tax Department had issued Notice to GST Department for remitting the refund directly to their Department. Certain tough circumstances were also pleaded by the Company regarding demonetisation and implementation of GST, the Textile Industry facing huge financial crisis, which had affected the recovery of tax liability determined by the accused Company was not controverted by the Income Tax Department and to that payable tax, as per the self-assessed Return of income, the Company had already paid and further amount was to be directly paid by the GST Department and as such amount was to be adjusted against GST refund which constitute the 80% of the total tax liability. The accused Company has stated the reasons for the delay and expressed readiness to pay the balance of ₹ . Delayed payment under the provisions of the Act may call for penalty or interest but by no stretch of imagination in the circumstances as pleaded by the petitioners, could be construed as an attempt to evade the tax so as to entail prosecution of the petitioner for the alleged offence of Section 276C(2) of the Act. Thus, in the considered opinion of this Court, the prosecution initiated against the petitioners is illegal and tantamount to abuse of process of law and required to be quashed. Petition is allowed. The complaint made by the Office of the Assistant Commissioner of Income Tax, Surat which has culminated into Criminal Case pending before the Court of learned Chief Judicial Magistrate, Surat against the petitioners for the offence punishable under Section 276C(2) read with Section 278E of Income Tax Act, as well as the order issuing summons dated 13.6.2019 are quashed and set-aside
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