2024 (5) TMI 1515 - HC - Income Tax

Cognizance for the offences u/s 276B and 276BB - petitioner has deducted TDS and collected TCS for the financial year 2019 but the same was not deposited with the revenue within the stipulated time frame - delay in depositing the said amount ranging from 1 day to 173 days - petitioner in the defence submitted that the delay in depositing the TDS and TCS amount was caused due to the prevailing COVID-19 restriction HELD THAT - Income Tax Department does not dispute the fact that the case of the petitioner is covered by the judgment of this Court in Sree Metaliks Limited 2024 (4) TMI 713 - ORISSA HIGH COURT wherein held the maximum delay of 394 days for depositing the TDS amount to the revenue account have been well explained by the petitioners therefore the authorities ought to have taken into consideration same particularly for the reasons that the petitioners-company has suffered the I.B. proceeding and the restriction imposed during the COVID-19 pandemic. Present petition deserves merit. Accordingly the same is allowed.

Summary

The present petition concerns the challenge against the order dated 22.02.2023 passed by the learned Addl. Chief Judicial Magistrate (Special Court), Cuttack in 2(c) CC Case No.13 of 2023, where cognizance for the offenses under Sections-276B and 276BB of the Income Tax Act, 1961 was taken against the petitioner. The complaint alleged that the petitioner failed to deposit TDS and TCS amounts totaling Rs. 59,02,093/- and Rs. 57,27,898/- respectively within the stipulated time frame, with delays ranging from 1 day to 173 days. The petitioner attributed the delays to COVID-19 restrictions at the time, but subsequently deposited the amounts with interest. The petitioner sought quashing of the proceedings, arguing that the delays were justified given the circumstances.The defense relied on a judgment of this Court in a similar case, Sree Metaliks Limited and others vs. Union of India, where delays in depositing TDS amounts were explained and the proceedings were quashed. The defense argued that the present petitioner's case was directly covered by this judgment and Circular No F No 285/90/2008-IT(Inv-I)/05 dated 24.04.2008. The Senior Standing Counsel for the Income Tax Department did not contest the applicability of the judgment to the present case.The Court, after considering the submissions of both parties and the precedent set in the Sree Metaliks Limited case, found merit in the present petition and allowed it. Consequently, the order dated 22.02.2023 and the consequential proceedings in 2(c) CC Case No.13 of 2023 were quashed in favor of the petitioner, with no order as to costs.In summary, the Court considered the circumstances leading to the delays in depositing TDS and TCS amounts, weighed the arguments presented by both parties, and ultimately relied on a previous judgment to quash the proceedings against the petitioner.