9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 1070 - HC - Income TaxProceedings for an offence u/s 276-B - non-payment/belated remittance of the TDS - Failure to pay tax to the credit of Central Government - interpretation given to term reasonable cause - HELD THAT - A fair look at the explanation and reply which was given by the Petitioners to the show-cause notice would reveal that the Petitioners have furnished the information as to when they received the fee reimbursement from the Government relating to the students, whose admissions occupied lion s share i.e., 90%. It appears 90% of the students were admitted on fee reimbursement scheme. That being the case, when the Petitioners filed the documents to show that they have not received fee reimbursement within time and immediately after receiving the fee reimbursement amount, they have remitted the amount to the Government Account, which is conveniently ignored by the Respondent Authorities. A cursory look at the proceedings of the learned Commissioner would show that the Petitioners have not furnished any information to buttress their contention that because of the delay in grant of fee reimbursement by the Government of Andhra Pradesh, they could not remit the amount to the Central Government Account within time. As decided in M/s US Technologies International Pvt. Ltd. 2023 (4) TMI 418 - SUPREME COURT on interpretation of Section 271C which is a penal provision, it is clear that on mere belated remittance, no penalty shall be leviable. In the course of the judgment, the Hon ble Apex Court also referred to various other provisions including Section 276-B and observed that the consequences of consequences on non-payment/belated remittance of the TDS would be under Section 201(1A) and Section 276B of the I.T. Act. Taking a decision to prosecute any person for violation of the provisions under Section 276B, is subject to Section 278AA of I.T. Act, and when the Petitioners are able to establish the reasonable cause for the delay in remittance of the amount to the Central Government Account though deducted the tax at the source. It is a case of appreciation of a point on factual aspect as to the satisfaction of the Authorities on the point of reasonable cause. In the present case, learned Commissioner for Income Tax conveniently ignored the material placed by the Petitioners to establish that there was a reasonable cause for their failure to remit the amount within a stipulated time. This Court is of the considered view that the reason provided by the Petitioner for the delay in remitting the amount to the Central Government is sufficient to constitute reasonable cause in view of Section 278AA of the I.T. Act and hence criminal prosecution against the Petitioners is not warranted. Decided in favour of assessee.
Issues Involved:
1. Whether there are any justifiable grounds for quashment of proceedings against the Petitioners/Accused Nos. 1 to 3 under Section 276-B of the Income Tax Act, 1961. Detailed Analysis: Issue 1: Whether there are any justifiable grounds for quashment of proceedings against the Petitioners/Accused Nos. 1 to 3 under Section 276-B of the Income Tax Act, 1961. Facts: The Petitioners, accused of violating Section 276-B of the Income Tax Act, 1961, sought quashment of proceedings in C.C. Nos. 31, 32, and 33 of 2018. The Petitioners deducted TDS on various payments but failed to deposit the amounts within the stipulated time for the assessment years 2014-15, 2015-16, and 2016-17. Despite paying the late payment interest, the Income Tax Department initiated criminal proceedings. Grounds for Quashment: The Petitioners argued: - No case was made out against them, and the prosecution was an abuse of process. - They had not committed any offense as the amounts were eventually paid with interest. - The delay was due to late fee reimbursements from the State Government. - There is no provision for prosecution for late payment, only for non-payment. - The prosecution would harm the reputation of their educational institution. Arguments: - The Petitioners contended that the delay was due to late fee reimbursements from the Government of Andhra Pradesh, which constituted a reasonable cause. - The Respondents argued that the Petitioners failed to show a reasonable cause for the delay and that the Commissioner of Income Tax rightfully initiated criminal prosecution. Court's Determination: - The court examined the inherent powers under Section 482 of Cr.P.C. to prevent abuse of process and secure justice. - It acknowledged that the Petitioners, an educational institution, had deducted TDS but delayed depositing it due to delayed fee reimbursements from the government. - The court referred to Sections 276B and 278AA of the I.T. Act, noting that prosecution under Section 276B can be avoided if a reasonable cause for the delay is established. - Citing precedents, the court emphasized that "reasonable cause" should be fair, not absurd, irrational, or ridiculous, and that the Petitioners had provided a reasonable explanation for the delay. - The court noted that the Petitioners had submitted documents showing the delay in receiving fee reimbursements, which was ignored by the Respondent Authorities. - The court referenced the Supreme Court judgment in M/s US Technologies International Pvt. Ltd. v. The Commissioner of Income Tax, which held that mere belated remittance does not warrant penalty under Section 271C of the I.T. Act. Conclusion: - The court concluded that the Petitioners had established a reasonable cause for the delay in remittance due to delayed fee reimbursements. - It held that the criminal prosecution against the Petitioners was not warranted and quashed the proceedings in C.C. Nos. 31, 32, and 33 of 2018. - The court allowed the Criminal Petition Nos. 1207, 1208, and 1212 of 2020, thereby closing any pending Interlocutory Applications. Summary: The Andhra Pradesh High Court quashed the criminal proceedings against the Petitioners/Accused Nos. 1 to 3 under Section 276-B of the Income Tax Act, 1961, on the grounds that they had established a reasonable cause for the delayed remittance of TDS due to late fee reimbursements from the State Government. The court emphasized that the inherent powers under Section 482 of Cr.P.C. should be exercised to prevent abuse of process and secure justice, and that the Petitioners' explanation constituted a reasonable cause under Section 278AA of the I.T. Act.
|
