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2024 (12) TMI 205 - HC - Income TaxCognizance for the offence u/s 276B r.w.s. 278B - delay deposoting TDS amount - HELD THAT - TDS amount in question, which is the subject matter of difference economic offence cases as well as C.O. Case, has already been deposited with interest with the Income Tax Department belatedly and the same has not been denied and if such a situation is there, the case of the petitioners are fully covered in light of the judgment of this court in the case of M/s. Dev Multicom Pvt. Ltd 2022 (3) TMI 1038 - JHARKHAND HIGH COURT which has been affirmed by the Hon ble Supreme Court in 2023 (6) TMI 1174 - SC ORDER and pursuant to that in the Finance Act, 2024, the Parliament on his own wisdom has made amendment in Section 276 (B) and huge amount of TDS has already been deposited with the Income Tax Department, which has not been denied in the counter affidavit, filed by the Income Tax Department in respective cases, as such, to allow the proceeding to continue will amount to an abuse of the process of law. As such, the entire criminal proceedings and the cognizance orders in their respective cases, passed by the learned Special Judge, Economic Offices, Ranchi, in the respective Economic Offence Cases / C.O. Case, whereby cognizance has been taken against the petitioners for the offences under Sections 276 (B) and 278 (B) of the Income Tax Act, pending in the Court of learned Special Judge, Economic Offences, Ranchi / Dhanbad, are hereby, quashed.
Issues:
1. Quashing of criminal proceedings under Section 276-B and 278-B of the Income Tax Act for belated TDS deposits in various financial years. Detailed Analysis: The judgment involved multiple writ petitions seeking to quash criminal proceedings related to belated TDS deposits under Section 276-B and 278-B of the Income Tax Act for different financial years. The petitioners argued that the TDS amounts were deposited belatedly due to financial hardships, and they had already deposited the amounts with interest before the show cause notice. They relied on a previous judgment by the court in Dev Multicom Pvt. Ltd case, which highlighted that prosecution should not proceed if the amount in default has been deposited with interest. The petitioners contended that the continuation of proceedings would amount to an abuse of the court's process. The petitioners further pointed out that the Hon'ble Supreme Court had dismissed a challenge to the court's previous order, which was also considered by other High Courts leading to an amendment in the Finance Act, 2024. This amendment inserted a proviso under Section 276-B stating that if the TDS amount has already been deposited, prosecution cannot be initiated. The petitioners urged for the quashing of criminal proceedings based on these grounds. The Income Tax Department, represented by senior standing counsel, argued that the TDS amounts were deposited belatedly, indicating a habitual practice by the petitioners. However, the State counsel concurred that the matters were covered by the previous judgment. The court, after considering the submissions, noted that the TDS amounts in question had been deposited with interest belatedly, a fact not denied by the Income Tax Department. Given the precedent set in the Dev Multicom Pvt. Ltd case, affirmed by the Hon'ble Supreme Court and the subsequent amendment in the Finance Act, 2024, the court found that allowing the proceedings to continue would constitute an abuse of the legal process. Consequently, the court quashed the criminal proceedings and cognizance orders in all the respective cases related to the belated TDS deposits under Sections 276-B and 278-B of the Income Tax Act. In conclusion, all the writ petitions were allowed, and the matters were disposed of by quashing the criminal proceedings and cognizance orders against the petitioners in the Economic Offence Cases.
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