TMI Blog2022 (3) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act shall not normally be proposed when the amount involved and / or the period of default is not substantial and the amount in default has also been deposited in the meantime to the credit of Government. No such consideration will, of course, apply to levy of interest u/s 201(1A) - This is quoted in the case of Sonali Autos (P) Ltd. (Supra). Moreover after receiving the deducted amount with interest, the prosecution has been launched against the petitioners, which is not in accordance with law. If the petitioners failed to deposit the amount in question within the stipulated time, i.e. by the 7th day of the subsequent month, it was required to launch the prosecution immediately, which has not been done in the cases in hand. Moreover Section 278(AA) of the Act clearly states that no person for any failure referred to under Section 276(B)of the Act shall be punished under the said provisions, if he proves that there was reasonable cause for such failure. The judgment relied by Ms Amrita Sinha, the CBDT guidelines were not considered. On this ground these cases are distinguishable in view of the facts and circumstances of the cases relied upon by Ms. Amrita Sinha. The amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .M.P. No. 2941 of 2018]. (ii) For quashing of the cognizance order dated 09.02.2018 passed by the learned Special Judge, Economic Offences, Dhanbad, whereby cognizance has been taken against the petitioner for the offences under Section 276(B) of the Income Tax Act, in connection with Economic Offence Case [C.O. No. 01 of 2018] as well as the entire criminal proceedings [in Cr.M.P. No. 2942 of 2018]. (iii) For quashing of the cognizance order dated 27.03.2018 passed by the learned Special Judge, Economic Offences, Dhanbad, whereby cognizance has been taken against the petitioners for the offences under Sections 276(B) and 278(B) of the Income Tax Act, in connection with Economic Offence Case [C.O. No. 22 of 2018] as well as the entire criminal proceedings [in Cr.M.P. No. 2943 of 2018]. (iv) For quashing of the cognizance order dated 28.03.2018 passed by the learned Special Judge, Economic Offences, Dhanbad, whereby cognizance has been taken against the petitioners for the offences under Sections 276(B) and 278(B) of the Income Tax Act, in connection with Economic Offence Case [C.O. No. 24 of 2018] as well as the entire criminal proceedings [in Cr.M.P. No. 2944 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal officer of accused no.1 having PAN-AYDPS0747D and was/ is quite aware of the day to day conduct of the business and entire business affairs of the accused no.1 and actively participating in the function and management of affairs of the accused no.1 and being a principal officer as per section 2(35) of the I.T. Act of the accused no.1 he was liable and responsible to the partnership firm for the conduct of the business of the partnership firm i.e. accused no.1 for each and every act done by him or by any other person of the partnership firm for and on the behalf of accused no.1. It has further been alleged that accused no.2 for and on behalf of the accused no.1 is being a principal officer of accused no.1 deducted TDS amount, amounting to ₹ 396310/- for the F.Y.2016- 2017 but failed to credit the same to the account of Central Government of India, TDS Ward Dhanbad. To avoid repetition of the contents of the detail a list of details of PAN, payment date, due date, date of deposit, late payment, interest, date of deduction, period is attached. It has been further being alleged that accused no.2 being principal officer of accused no.1 and quite aware of the day to da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business and day to day affairs of the business of accused no.1 and accused no.2 was liable and responsible for making payment of T.D.S amount deducted at source for and on behalf of the accused no.1. As per the list attached herewith in due time in the light of the provisions laid down under section 194C of the Income Tax Act but the accused persons intentionally, knowingly, deliberately and having mens rea in mind without reasonable cause excuse and explanation failed to make payment of TDS amount as discussed above and admitted the delay in making payment of TDS amount of financial year 2016-2017 to the credit of TDS Ward Dhanbad/Central Government of India and converted the same into their own use for their wrongful gain and wrongful loss to I.T. Department TDS Ward Dhanbad and as such the accused persons are liable to be prosecuted under section 276B r/w section 278B of the Income Tax Act since the offence under section 276B of the Income Tax Act has been committed by the partnership firm (accused no.1). It has further been alleged that all the relevant documents workplace and produced before Hon ble Commissioner of Income Tax (TDS), Patna and Hon ble Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lure to pay tax to the credit of Central Government, the prosecution can be launched. He further submits that the prosecution against the petitioners under Sections 276(B) and 278(B) of the Act is mechanical and contrary to the instructions, bearing F. No. 255/339/79-IT (Inv.) dated 28.05.1980, issued in this regard by the CBDT, wherein, it has been mentioned that prosecution under Section 276-B of the Act should not normally be proposed when the amount involved and / or the period of default is not substantial and the amount in default has also been deposited in the meantime to the credit of the Government. No such consideration will, of course, apply to levy of interest under Section 201(1A) of the Act. 6. Learned counsel appearing for the petitioners submits that the aforesaid circular has been considered by the Hon ble High Court of Patna in the case of the Sonali Autos (P) Ltd. Versus State of Bihar. Relying on this circular the Hon ble Court held that there was no occasion to file the prosecution against the petitioners, as the amount in question has already been deposited and there was no consideration at the time of sanction under Section 279(1) of the Act. 7. To butt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chapter XVII-B by deductors other than an office of the Government shall be paid to the credit of the Central Government. (a) on or before 30th day of April where the income or amount is credited or paid in the month of March; and (b) in any other case, on or before seven days from the end of the month in which- (i) the deduction is made; or (ii) income tax is due under sub-section (1A) of section 192. 11. To buttress her arguments so far as the criminal prosecution and civil liability are concerned, she relied upon in the case of Income Tax Officer Versus Sultan Enterprises Ors., reported in (2001) SCC Online Bom 1219. Paras-3 and 4 thereof are quoted hereunder:- 3. The facts of the case are not much in dispute. The offence in question related to non-deposit of T.D.S. amount within the prescribed time and, therefore, action was taken against them and dues were recovered by imposing penalty and interest. This also amounts to offence punishable under Section 276B and 278B of the Income Tax Act, 1960. The learned C.J.M. erred in applying the principle of double jeopardy as provided under Section 300 of Criminal Procedure Code for the simple reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been different if the petitioner would convince this court that even if the allegations made by the respondents were all true those facts did not constitute any offence under Section 276B of the Income Tax Act. I, thus, find no reason to entertain this application at this stage in view of the fact that the questions involved are all disputed questions of facts to be gone into on consideration of the evidence. 14. On these grounds she submits that this Court may not exercise its power under Section 482 Cr.P.C. at this stage. 15. In view of the above facts and arguments of both the parties, the Court has gone through the materials available on record. For ready reference, 276(B) of the said Act is quoted hereinbelow:- 276(B) Failure to pay tax to the credit of the Central Government under Chapter XII-D or Chapter XVII-B Section 276B of The Income Tax Act, 1961 lays down that if a person fails to pay to the credit of the Central Government: (I) The tax deducted at source by him as required by or under the provisions of Chapter XVII-B; or (II) The tax payable by him, as required by or under (a) Sub-section (2) of section 115-O; or (b) The second provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and after considering this guidelines, the Court has interfered with the matter and quashed the entire criminal proceedings. In CBDT instructions, it is mentioned that prosecution under Section 276(B) of the Act shall not normally be proposed when the amount involved and / or the period of default is not substantial and the amount in default has also been deposited in the meantime to the credit of Government. No such consideration will, of course, apply to levy of interest under Section 201(1A) of the Act. This is quoted in the case of Sonali Autos (P) Ltd. (Supra). Moreover after receiving the deducted amount with interest, the prosecution has been launched against the petitioners, which is not in accordance with law. If the petitioners failed to deposit the amount in question within the stipulated time, i.e. by the 7th day of the subsequent month, it was required to launch the prosecution immediately, which has not been done in the cases in hand. Moreover Section 278(AA) of the Act clearly states that no person for any failure referred to under Section 276(B)of the Act shall be punished under the said provisions, if he proves that there was reasonable cause for such failure. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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