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TMI Blog2019 (5) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... their liability. The question of determining the liability and consequent imposition of penalty would arise only in case of dispute with regard to the liability to remit the deducted tax. In the instant case, the facts alleged in the complaint clearly indicate that the amount was credited subsequent to the survey. As a result, even this defence is not available to the petitioners. Lastly, the contention urged by the petitioners that the circular/instruction issued by the department have binding force though needs to be accepted as a principle of law, but in the instant case, none of the parties have placed the said instruction or circular for perusal of this Court. No material is available to show that the petitioner No.1-Company has deposited the amount within the extended time. On the other hand, the allegations are to the effect that survey itself was conducted on 20.09.2014. According to prosecution, the amount was deposited subsequent to survey conducted by the Department. Under the said circumstances, even on question of fact, the above principle does not come to the aid of the petitioners. As a result, no merit in the contentions urged by petitioners. - Decided aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not have resorted to prosecute the petitioners for the alleged offence. In support of this submission, learned counsel has placed reliance on the decisions of the Delhi High Court in the case of Sequoia Construction Co. P. Ltd and Others vs. P.P.Suri, ITO, Central Circle, XX, New Delhi reported in 1986 (158) ITR 496 and in the case of Indo Arya Central Transport Limited Others vs. Commissioner of Income Tax (TDS), Delhi-1 and Another reported in 2018 SCC Online Del 7995 . Second, the TDS deducted by the petitioners was deposited with interest with the Department within 12 months from the respective dates of the deductions. The said deposit was made in accordance with the circular/instruction issued by the Central Board of Direct Taxes (CBDT) dated 24.04.2008 in F.No.285/90/2008-IT (Inv.)/05. Under the said circular/instruction, the assessee was permitted to deposit the tax deducted at source within 12 months from the date of deductions to obviate any penal consequences. 5. Further, placing reliance on the decision of the Delhi High Court in Indo Arya s case referred to supra, with reference to para No.7 thereof, learned counsel would submit that the said cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues raised by the petitioners are ex-facie factual and could constitute defence of the petitioners, as constituting reasonable cause . In view of Section 278AA of the Act, the onus of proving the said defence is on the accused and therefore, on this score also, the impugned proceedings cannot be quashed. 9. On the question that the prosecution of the accused could not have been launched without conducting adjudication proceedings to determine the penalty is concerned, the learned standing counsel has referred to the decision of the High Court of Madras in the case of Rayaal Corporation (P) Limited vs. V.M. Muthuramalingam, ITO reported in (1980) 4 Taxman 346 (Madras), wherein it has held that so far as prosecution under Section 276B is concerned, it is not controlled either by Section 201(1A) or Section 221. All that the Section says is that if a person, without reasonable cause or excuse, fails to deduct or after deducting, fails to pay the tax, as required by or under the provisions of Sub-Section (9) of Section 80E or Chapter XVII-B, he shall be punishable with rigorous imprisonment and shall also be liable to fine . 10. Insofar as the circular/instruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct and pay such tax] [(1A) Without prejudice to the provisions of subsection (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any pat of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,- (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200:] [Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident but is not deemed to be an assessee in default under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r non-payment in time. Under Section 276-B, 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. 14. Similar preposition is laid down in Rayala Corporation s case referred supra, wherein it is held that So far as prosecution under section 276B is concerned, it is not controlled either by section 201(1A) or section 221. All that the section says is that if a person, without reasonable cause or excuse, fails to deduct or after deducting fails to pay the tax, as required by or under the provisions of sub-section (9) of section 80E or Chapter XVII-B, he shall be punishable with rigorous imprisonment and shall also be lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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