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TMI Blog2019 (5) TMI 1647X X X X Extracts X X X X X X X X Extracts X X X X ..... 276B, also cannot be accepted for the reason that the petitioners/accused have not disputed 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. - petition is dismissed - CRIMINAL PETITION No. 868/2014 - - - Dated:- 26-4-2019 - MR. JOHN MICHAEL CUNHA J. Petitioners (By Sri. Muniyappa, Advocate) Respondent (By Sri. Jeevan J. Neeralgi, Advocate) O R D E R Prosecution has been launched against the petitioners by the Income Tax Department for the alleged offences punishable under Sections 276B read with Section 278B of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. Briefly stated, facts of the case are that petitioner No.1 - Company was engaged in the business of real estate and property development. Complainant- Department conducted a survey under Section 133A of the Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining the liability of the accused in an adjudication proceedings and without quantifying the penalty, respondent-complainant should 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indo Arya s case referred to supra, with reference to para Nos.8 and 9 thereof, learned standing counsel has emphasized that the issues 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 Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct 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 provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Court observed that: (ITR p.135) [T]here is no provision in the Income Tax Act imposing criminal liability for delay in deduction or for 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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