2019 (1) TMI 804 - HC - Income Tax

Action against the employer u/s 276B - non issuing TDS Certificate after deducting TDS from the employees - appropriate steps so that the employer does not repeat such behavior of not issuing TDS Certificate after deducting TDS from the employees - Held that - Department has not taken appropriate steps against the employer as a result, large amount of tax recoveries are outstanding, which are not being effectively made. He also argued that not depositing the tax deducted at source from the employee in the Government revenues, would amount to misappropriation of public funds. As submitted that prosecution under Section 405 of the Indian Penal Code should also be initiated. The petitioner s principal grievance stands resolved, in the facts of the present case, we are not inclined to examine the petition further. Any of the submissions made by the petitioner and the reliefs claimed pursuant to such submissions, would be in the realm of public interest litigation, in which form this petition as admitted, is not filed. Our attention was drawn to an order dated 18th October, 2018 passed by the Division Bench of this Court in which certain observations have been made. Department is aware about the said order and we are sure that the Department will take appropriate view in connection with such observations. With respect to the initiation of proceedings u/s 276B also, we find that the same is within the purview of the Department s consideration and we expect that the department will take appropriate view on the basis of facts on record.

Summary

Issues:
1. Petition for mandamus to collect TDS information and initiate action under Income Tax Act.
2. Request for general directions to ensure compliance with Income Tax Act by the employer.
3. Allegation of misappropriation of public funds and request for prosecution under IPC.

Analysis:
1. The petitioner sought a writ of mandamus to direct the tax authorities to collect Tax Deducted at Source (TDS) information from the employer for the relevant financial year and issue Form 16 for timely filing of Income Tax Return. The petitioner's main grievance was resolved as he received the required documents. However, he urged the Income Tax Department to take action against the employer under Section 276B of the Income Tax Act to prevent future non-compliance. The petitioner highlighted the outstanding tax recoveries and the need for effective measures to address non-issuance of TDS certificates by the employer, emphasizing the potential misappropriation of public funds if taxes are not deposited with the government. He also suggested initiating prosecution under Section 405 of the Indian Penal Code.

2. The court noted that since the petitioner's primary concern was addressed, further examination of the petition was not warranted. The court indicated that any additional submissions or reliefs sought by the petitioner would fall under public interest litigation, a category different from the present petition. Reference was made to a previous court order highlighting certain observations, and it was expected that the Income Tax Department would consider these observations appropriately. The court emphasized that decisions regarding the initiation of proceedings under Section 276B of the Income Tax Act were within the department's jurisdiction, and it was anticipated that the department would act based on the available facts.

3. Ultimately, the petition was dismissed by the court. The judgment concluded with the court's observations regarding the resolved nature of the petitioner's main grievance, the department's awareness of relevant court orders, and the expectation for appropriate actions by the Income Tax Department in response to the issues raised. The court's decision to dismiss the petition signified that, in the current circumstances, no further legal intervention or relief was deemed necessary based on the resolved nature of the petitioner's initial concern.