TMI Blog2018 (10) TMI 1964X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilty under section 276-B of the Income Tax Act 1961 (hereinafter to be referred as the Act‟). The petitioner deducted tax at source, which was payable into the Government Treasury. In other words till deposit, the petitioner held Government/public monies in trust. This money ought to have been deposited in the Treasury, as per the statutory procedure. It was not so done. There was a lapse of over 12 to 17 months. The petitioner retained and misappropriated the monies for that period and illegally enjoyed the benefits therefrom. The learned counsel for the petitioner submits that upon the petitioner realising its mistake, on its own it paid all the monies into the Treasury. Therefore, the expression reasonable cause‟ used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arther than mere reasonableness. The distinction is of course thin. The Legislature has rather, apart from sufficient cause, now enjoined that it should also be good cause for not depositing the money where defaults have occurred. The standard of proof and explanation and the onus to be discharged by the assessed is much higher and heavy. In a criminal case, however, the dictates of law just demand the requirement of reasonable cause, i.e., what appears ex facie to reason, which is much more milder. Moreover, penalty proceedings under the income tax law are primarily quasi-criminal in nature. During their course, the rigour of the criminal law that a prosecution case must entirely stand on its own legs and not on the weakness of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance-sheet of the company showed that the current liabilities were reduced by about Rs. 3.6 lakhs as compared to the preceding year. From this circumstance, it was urged that the company was not lacking in funds and if it could eliminate part of those liabilities, it could have as well paid the dues of the Revenue. However, the reduction of those liabilities were at different stages in the year and do not essentially reflect the state of affairs at the time when deposits were to be effected with the Revenue. In any case, the entire conspectus of facts and circumstances were before the Commissioner and the Appellate Tribunal and if they have after consideration come to the view that good and sufficient reason existed with the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity for delay in deduction or for non-payment in time. Under Section 276B, delay in payment of income tax is not an offence . According to the learned Judge, such a provision is subject to penalty under Section 201(1) of the Act. 48. We are unable to agree with the above view of the High Court. Once a statute requires to pay tax and stipulates period within which such payment is to be made, the payment must be made within that period. If the payment is not made within that period, there is default and an appropriate action can be taken under the Act. Interpretation canvassed by the learned counsel would make the provision relating to prosecution nugatory. I In view of the above dicta, the Court is not persuaded by the petitioner& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 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 impugned order has rightly reasoned as under:- 21. It is further argued that the delay in deposit of tax deducted at source by the company was caused due to financial crises being faced by tine company and this fact was already explained to the complainant department through reply dated 26.08.14 and the delay was neither intentional nor deliberate on the part of the company, and therefore, the company is not liable to be prosecuted for the said offence. It was further argued that the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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