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TMI Blog2022 (3) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the petitioner No. 2 was stationed at Mumbai and seeing this, the learned Magistrate was required to follow the mandatory provision of Section 202 Cr.P.C., which has been amended in the year 2005 making it mandatory to postpone the issue of process, where the accused is not residing within the territorial jurisdiction of the magistrate concerned. A person, who at the time of offence was committed, was in-charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. It has not been disclosed in the petition that as to how the petitioner no. 2 is overall in-charge of the business and the case of Girdhari Lal Gupta [ 1970 (8) TMI 83 - SUPREME COURT] and Dayle De souza [ 2021 (11) TMI 67 - SUPREME COURT] are helping the petitioners. There might be a case of slight harm in not crediting the TDS amount by 07.03.2013 and in fact considering that the interest has already been paid, it can be safely said that the harm has not taken place. The entire criminal proceeding whereby cognizance has been taken against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdiction of your kind honour. (iii) The accused no. - 1 is a private limited company having TAN -RCHM02200C registered under The Companies Act and derived Income from business of generating power and is an assessee within the meaning of Income Tax Act under T.D.S. Ward Circle, I.T. Department, Dhanbad. (iv) The accused no. - 2 is the principal officer of accused no. -1 having PAN - AFETR8883F and was / is quite aware of the day to day, conduct of the business and entire business affairs of accused no. 1 and actively participating in the function and management of companies affairs of accused no. - 1 and being a principal officer as per Section 2(35) of the I. T. Act of accused no. - 1 he was liable and responsible to the company for the conduct of the business of the company i.e., accused no. -1 for each and every act done by him or by any other person of the company for and on behalf of accused no.-1. (v) The accused No. 2 for and on behalf of accused no. 1 being a principal officer of accused no. 1 deducted TDS amount, amounting to ₹ 8,22,23,551/- for F.Y.-2012-13 but failed to credit the same to the account of Central Government of India, TDS Ward D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the accused persons was sent to the Hon'ble Commissioner of Income Tax, TDS Ward, Patna for granting sanction to launch a prosecution U/s 276-B r/w Section 278-B of the 1. T. Act against the accused persons. (x) Taking into account the aforesaid facts and circumstances that the accused no. - 2, who was quite aware of the conduct of the business and day to day affairs of the business of accused no. -1 and accused no. - 2 was liable and responsible for making payment of T.D.S. amount deducted at source for and on behalf of accused no. - 1 as per list attached herewith in due time in the light of the provision laid down U/s 194C of the I. T. Act but the accused persons intentionally, knowingly, deliberately and having mens rea in mind without reasonable cause, excuse and explanation failed to make payment of TDS amount as discussed above and admitted the delay in making payment of TDS amount for F.Y.-2012-2013 to the credit of TDS ward Dhanbad / Central Government of India and converted the same into their own use for their wrongful gain and wrongful loss to the I. T. Department TDS Ward, Dhanbad and as such the accused persons are liable to be prosecuted U/s 276-B r/w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpted. (xvi) The complainant is competent to file the present case at the instance / authorization given by Hon ble Commissioner of Income Tax, TDS Ward, Patna and as such the present complaint is being filed by him against the accused persons. 4. Mr. Pandey Neeraj Rai, learned counsel appearing for the petitioners submits that the prosecution has been lodged under Section 276(B) and 278(B) of the Income Tax Act on the ground that the TDS has been deposited by the petitioners a bit late and on those facts the complaint has been filed. He submits that the TDS amount in question was received by the company in the month of February, 2013 and in terms of Rule-30 of the Income Tax Rules, 1962, it is required to be deposited in terms of Rule-30(2)(B), as such, the amount was required to be deposited on or before 07.03.3013, however, the same was credited in the account of Income Tax Department on 08.03.2013. He took the Court to the Bank statement, contained in Annexure-7 (Page No. 62) to the petition and by way of referring this document, which is the statement of the Bank submits that the amount in question was paid on 07.03.2013 between 10.00 P.M. to 11.00 P.M. He further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient ground for proceeding against the accused before issuing summons in such cases. 7. On the same line, he further relied in the case of Vijay Dhanuka Ors. Versus Najima Mamtaj Ors., reported in (2014) 14 SCC 638, wherein in para-13 thereof the Hon ble Supreme Court held as follows:- 13. In view of the decision of this Court in Udai Shankar Awasthi v. State of U.P., this point need not detain us any further as in the said case, this Court has clearly held that the provision aforesaid is mandatory. It is apt to reproduce the following passage from the said judgment: 40. The Magistrate had issued summons without meeting the mandatory requirement of Section 202 CrPC, though the appellants were outside his territorial jurisdiction. The provisions of Section 202 CrPC were amended vide the Amendment Act, 2005, making it *mandatory to postpone the issue of process* where the accused resides in an area beyond the territorial jurisdiction of the Magistrate concerned. The same was found necessary in order to protect innocent persons from being harassed by unscrupulous persons and making it obligatory upon the Magistrate to enquire into the case himself, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any for the conduct of its business at the time of the commission of the offence in question is deemed to be additionally liable. The words in-charge of the company and responsible to the company are pivotal to sub-section (1). This requirement has to be satisfied for the deeming effect of subsection (1) to apply and for rendering the person liable to be proceeded against and, on such position being proved, punished. Interpreting an identical expression used in Sections 23-C(1) and 23-C(2) of the Foreign Exchange Regulation Act, 1947, this Court in Girdhari Lal Gupta v. D.H. Mehta, has held: 6. What then does the expression a person in-charge and responsible for the conduct of the affairs of a company mean? It will be noticed that the word company includes a firm or other association, and the same test must apply to a director in-charge and a partner of a firm in-charge of a business. It seems to us that in the context a person in-charge must mean that the person should be in over-all control of the day to day business of the company or firm. This inference follows from the wording of Section 23-C(2). It mentions director, who may be a party to the policy being fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking cognizance are fit to be quashed. 11. Per contra, Ms. Amrita Sinha, learned counsel appearing for the O.P. No. 2 Income Tax Department submits that whatever has been argued by the learned counsel appearing for the petitioners can be looked into only in the trial. By way of referring Annexure-3 of the petition, she submits that vicarious liability has been disclosed therein. She further submits that the petitioner No. 2 is the principal employer of the company. She further submits that the there is no delay of one day rather there is delay of two months in crediting the T.D.S. By way of referring to Annexure-5, she submits that the notice was to be given to the petitioner No. 2, who appeared before the Commissioner of Income Tax (TDS) to explain the things. By way of referring Annexure-6, she further submits that a reply was filed by the petitioner No. 2. She submits that the period of delay is counted from the date of deduction of the TDS and not from the date of deposit of the TDS, as per the CBDT guidelines. She further submits that the prosecution for not depositing the TDS and paying the interests are two different subjects. She further submits that paying the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the petitioner in this writ application will all be available to them in the criminal trial and if they can establish that those are sufficient, the criminal prosecution will fail. But at this stage, there is no scope for pre-empting the said criminal proceeding by entertaining this writ application. The position, however, would have been different if the petitioner would convince this court that even if the allegations made by the respondents were all true those facts did not constitute any offence under Section 276B of the Income Tax Act. I, thus, find no reason to entertain this application at this stage in view of the fact that the questions involved are all disputed questions of facts to be gone into on consideration of the evidence. 14. She distinguishes the judgments relied by Mr. Rai, on the point of Section 202 Cr.P.C. and submits that Section 202 Cr.P.C. cannot be read in isolation and it required to be read along with Section 200 and 202 Cr.P.C. By way of referring those Sections of the Cr.P.C. she submits that it was within the discretion of the Magistrate to differ of calling the petitioner No. 2 under Section 202 Cr.P.C. She submits that in view of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 CrPC to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice. 16. On these grounds, it has been argued on behalf of the petitioners that this petition is fit to be allowed, whereas it has been contended on behalf of the O.P. No. 2 that no interference is required under Section 482 Cr.P.C. 17. The Court has gone through the materials available on record. It is an admitted fact that the prosecution has been launched against the petitioners for delayed credit of TDS amount, under Sections 276(B) and 278(B) of the Income Tax Act. Section 276(B) of the Income Tax Act prescribed the punishment for not providing credit of the amount, for a term which shall not be less than three months and not more than 7 months and the fine. Sub-Rule-2 of Rule 30 of the Income Tax Rules, 1962 is quoted hereinbelow for ready reference: 30. .. (2) All the sums deducted in accordance with the provisions of Chapter XVII-B by deductors other than an office of the Government shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Bank of India, the credit initiation was made well within time. It might have been reflected in the account of the Central Government on the next day, as the Bank hours at that time was over before 11.00 o clock, however, now this transaction in view of the Government of India guidelines are taking place now a days in 24 hours. Thus, this Court is placing reliance in the case of Ravi Thapar Ors. (Supra) and comes to a conclusion that the documents of the State Bank of India can be looked into by this Court, sitting under Section 482 Cr.P.C. The court is not in agreement with the learned counsel appearing for the O.P. No. 2, who submits that Sections 200 and 202 of the Cr.P.C. are required to be read simultaneously. It is an admitted fact that the petitioner No. 2 was stationed at Mumbai and seeing this, the learned Magistrate was required to follow the mandatory provision of Section 202 Cr.P.C., which has been amended in the year 2005 making it mandatory to postpone the issue of process, where the accused is not residing within the territorial jurisdiction of the magistrate concerned. It has not been disclosed in the complaint as to how the petitioner No. 2 was respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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