9911796707
TMI Blog2020 (7) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... rce under various sections of TDS amounting to ₹ 37,90,87,796/- during the financial year 2012-2013 but has not deposited the said tax to the Government account within the stipulated period i.e. on or before 7 days from the end of the month in which the deduction is made as per the provisions of Income-tax Act read with Rule 30 of the Income Tax Rules. Thus, the Respondent No. 1 and 2 have committed offence punishable under section 276-B read with Section 278-B of the Income-tax Act for the offence the punishment is prescribed a minimum imprisonment of 3 months which can be extended up to an imprisonment of 7 years. Thus, it is clear that much before CIRP Process the alleged offence has been committed by the Respondent Nos. 1 and 2. The question involved in this Appeal is that actually who has committed the default by non-depositing the TDS in time certainly the alleged offence is committed during the financial year 2012-13. Therefore, the person responsible and in charge of the day to day affairs to the Company at relevant time has committed the default. Therefore, he only can be punished. As per the allegation, the Respondent No. 1 G Venketesh Babu was a person respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or faced liquidity crises and consequently could not pay salary to its employees. There was also delay in payment of Tax Deducted at Source (TDS) to the relevant authorities. In the meantime Corporate Insolvency Process was initiated against the Corporate Debtor on a Company Petition filed by IDBI Bank under section 7 of I B Code, 2016 and after admission the Corporate Debtor was under moratorium from 7-8-2017. The Adjudicating Authority under section 7 of the I B Code appointed Mr. Savan Godiawala as Interim Resolution Professional and subsequently confirmed as Resolution Professional of the Corporate Debtor. The Resolution Professional took charge of the Corporate Debtor Company and the powers of Board of Director were suspended. Thereafter, Adjudicating Authority vide its order dated 27-8-2018 appointed Mr. Savan Godiawala (Appellant) as the official liquidator of the Corporate Debtor. During the pendency of the liquidation proceedings erstwhile Managing Director of the Corporate Debtor Respondent No. 1 filed an Application under section 33(5), 35(1) (k) read with section 60(5) of I B Code, 2016 and Rule 11 of NCLT Rules 2016 seeking direction to liquidator (Appellant) to keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor, being aggrieved with this order, liquidator has filed this Appeal. 6. Learned Counsel for the Appellant submits that the Adjudicating Authority failed to consider that since the prosecution was initiated by the Income-tax Department, against the Respondent No. 1 as he was the person responsible and in charge of the day to day affairs of the Company being Managing Director, therefore, the Respondent No. 1 is defending himself. Learned Counsel for the Appellant further submits that learned Adjudicating Authority has failed to appreciate the precedent i.e., judgment of Hon'ble Kerala High Court in the case of ITO v. Joseph (1972) 83 ITR 362 which holds that the Criminal Prosecution launched under the provisions of Section 276-B of the Income-tax Act attached itself personally to the vender not to the Company. Learned Adjudicating Authority erroneously held that the prosecution was lodged against the Corporate Debtor thus compounding fees is payable by Corporate Debtor. 7. Learned Counsel for the appellant further submits that if compounding fees is paid on priority basis it will be in contravention of the mandate of Section 53 of the I B Code. 8. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequently confirmed as Resolution Professional of the Corporate Debtor thereafter, vide order dated 27-8-2018 passed by the Adjudicating Authority, the Appellant Mr. Savan Godiawala was appointed as the Official liquidator of the Corporate Debtor i.e., Respondent No. 2. It is also admitted fact that on 31-3-2016 Income-tax Office, Shri Mandip ACIT, Income-tax Department filed complaint under section 276-B read with Section 278-B of the Income-tax Act against the Respondent No. 1 being Managing Director and person responsible and in charge of day to day affairs of the Company and Respondent No. 2 i.e., Corporate Debtor with the allegation that the Tax deducted at source under various sections of TDS amounting to ₹ 37,90,87,796/- during the financial year 2012-2013 but has not deposited the said tax to the Government account within the stipulated period i.e. on or before 7 days from the end of the month in which the deduction is made as per the provisions of Income-tax Act read with Rule 30 of the Income Tax Rules. Thus, the Respondent No. 1 and 2 have committed offence punishable under section 276-B read with Section 278-B of the Income-tax Act for the offence the punishment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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