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TMI Blog2023 (9) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... yderabad is also not considered. The competent authority not considering the same amounts to not considering the facts of the case and granting sanction which is invalid. Apparently sanction was sought by suppressing facts or deliberately omitted. It is not disputed that the Sanction mentioning that the penal interest not being paid and the petitioners not replying to show cause is apparently wrong. For the said reason of launching prosecution on the sanction, which according to this Court is invalid, the proceedings before the learned Special Court are liable to be quashed. - HON BLE SRI JUSTICE K. SURENDER For the Appellant: Sri P. Pratap For the Respondents: Public Prosecutor for R1 Sri A. Radhakrishna, Sr. Standing Counsel for IT-R2 ORDER: 1. The petitioners are facing prosecution for the offences under Section 276-B r/w 278B(2) of Income Tax Act, 1961 (for short the Act ) for belated payment of TDS into the Central Government Treasury. 2. According to the Deputy Commissioner of Income Tax, who filed complaint, A1 company had deducted at source on more than 2664 occasions. The said total amount of Rs. 91,80,995/- had to be credited to the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 and the sanction order dated 16.02.2018. For the said reasons, proceedings against the petitioners have to be quashed. 7. Learned Special Counsel for Income Tax submitted that there is no dispute regarding amount being paid on 14.12.2017 regarding interest of Rs. 4,67,670/-, late filing fee of Rs. 1,73,970/- and also the entire TDS amount of Rs. 91,80,995/- prior to the notice dated 18.01.2018. Learned counsel further submitted that the reply was also filed on 01.02.2018, however, the same will not absolve criminal prosecution of the petitioners. Once there is a delay in remitting the TDS amount into the government treasury within the prescribed time, an offence is made out. He relied on the judgment in the case of Madhumilan Syntex Limited v. Union of India Criminal Appeal No. 1377 of 1999 dated 23.03.2007, wherein it was held as follows: The next contention that since TDS had already been deposited to the account of the Central Government, there was no default and no prosecution can be ordered cannot be accepted. Mr. Ranjit Kumar invited our attention to a decision of the High Court of Calcutta in Vinar Co. Anr. v. Income Tax Officer Ors., (1992) 193 ITR 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 01.02.2018, they are also not mentioned in the sanction order. However it is mentioned that the petitioners have neither replied nor appeared. 12. A prosecution can be launched only on the basis of sanction of the Principal Commissioner or appropriate authority. Section 279(1) of the Act is extracted hereunder: 279. (1) A person shall not be proceeded against for an offence under section-276 or section-277 or section-278 except at the instance of the Commissioner. (2) The Commissioner may either before or after the institution of proceedings compound any such offence. 13. The intention of the legislature in introducing requirement of Sanction in Enactments to be accorded by the competent authority is for the purpose of affording protection from vexations prosecution and to safeguard the interest of the innocent persons. Before granting sanction, the competent authority has to go through all the relevant material placed before it and after assessing the facts of the case and if the competent authority deems it appropriate to grant sanction, accordingly sanction is given for prosecution. 14. The Hon ble Supreme Court in several judgments held that the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been affected by any extraneous consideration. If is shown that the sanctioning authority was unable to apply its independent mind for any reason whatsoever or was under an obligation or compulsion or constraint to grant the sanction, the order will be had for the reason that the discretion of the authority not to sanction was taken away and it was compelled to act mechanically to sanction the prosecution. 16. The Hon ble Supreme Court in the recent judgment in the case of S.Athilakshmi v. State rep. by the Drug Inspector 2023 SCC OnLine SC 269 relying on the judgment of Mansukhlal s case held as follows: The sanction for prosecution given in the present case appears, prima facie, to suffer from vice of non-application of mind. There is no reference to any of the documents, evidence or the submissions submitted by either of the parties, no reasons assigned or even an explanation pertaining to the delay which indicates it has been passed in a mechanical manner. 17. The Hon ble Supreme Court in the case of Nanjappa v. State of Karnataka (2015) 14 Supreme Court Cases 186, held as follows: 23.5. The rationale underlying the provision obviously is that if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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