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TMI Blog2023 (10) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... effectively examined u/s 202 Cr.P.C., who has stated about the facts/offences alleged in the present case. The deposition of the sole witness is clearly not in respect of the statements made in the written complaint and thus not part of an inquiry. Thus in view of the judgment in Vijay Dhanuka and Ors. vs Najima Mamtaj and Ors. [ 2014 (3) TMI 1103 - SUPREME COURT] it is clear from the said order that no inquiry as obligatory u/s 202 Cr.P.C. has been conducted. The Magistrate did not comply with the provision of Section 202 Cr.P.C., even though the petitioners reside (State Rajasthan) outside the jurisdiction of the Court (District Kolkata). In the present case the Magistrate did not Conduct any inquiry into the case himself or direct an investigation as required under Section 202 Cr.P.C. before directing the issue of process and as such the order is not in accordance with law, and is thus an abuse of the process of law. It is evidently clear that assessee received the rent income, and the Tenant (Deductor) has deducted TDS but has not deposited the TDS so deducted into the Central Government Account. We note that issue u/s is no longer res integra. In the case of Kartik Vijaysinh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing organizations. 4. The accused persons placed work order with the complainant company for pattisam lift irrigation project (3086) and also issued work order for land development and formation of access road to work site pattisom (V), Palavaram (M), WG, District Region for a total sum of Rs. 8 crores above, and after discussion they also assured that total amount of the bill will be deposited with the TDS amount to the authority concerned. Believing their representation the complainant Company after completing the work order, raised bill and also requested the accuseds to deposit the TDS amount of Rs. 48,08,840/- with the authority concerned and accused persons assured that the said TDS amount had already been deposited with the authority concerned. But after query the complainant gathered information from the Income Tax papers that the accused persons did not deposit the TDS amount of Rs. 48,08,840/- with the Income Tax Department. The complainant after collecting the Income Tax papers informed the accused persons and requested them either to deposit the said TDS amount to the authority concerned or refund the said amount to complainant. 5. The accused persons flatly refused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Penal Code in any manner whatsoever. Fifthly, the correspondences and email referred hereinabove exchanged by and between the parties evidently shows claim and counter claim, which is purely civil in nature devoid of any culpability in any manner whatsoever thus the instant proceeding is an absolutely misnomer and gross abuse in the eye of law. 10. The impugned proceeding is thus utterly bad in law and the same is liable to be quashed. 11. Written notes of argument and Affidavit-in-reply have been filed reiterating the statements made in the revisional application. 12. Ms. Manaswita Mukherjee, learned counsel for the opposite party has reiterated the case of the complainant as stated in the petition of complaint, by filing affidavit-in-opposition and written notes of argument. 13. It is submitted that there is sufficient materials on record to prima facie make out a case against the petitioners in respect of the offenses alleged and as such the revision is liable to be dismissed. 14. From the materials on record, it is evident that:- i) Admittedly there was a business relationship between the parties. ii) The only dispute between the parties is that though TDS wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory or not. 12. The words "and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" were inserted by Section 19 of the Code of Criminal Procedure (Amendment) Act (Central Act 25 of 2005) w.e.f. 23-6-2006. The aforesaid amendment, in the opinion of the legislature, was essential as false complaints are filed against persons residing at far off places in order to harass them. The note for the amendment reads as follows: "False complaints are filed against persons residing at far off places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused." The use of the expression "shall" prima facie makes the inquiry or the investigation, as the case may be, by the Magistrate mandatory. The wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry" has been defined under Section 2(g) of the Code, the same reads as follows: "2. (g) 'inquiry' means every inquiry, other than a trial, conducted under this Code by a Magistrate or court;" It is evident from the aforesaid provision, every inquiry other than a trial conducted by the Magistrate or the court is an inquiry. No specific mode or manner of inquiry is provided under Section 202 of the Code. In the inquiry envisaged under Section 202 of the Code, the witnesses are examined whereas under Section 200 of the Code, examination of the complainant only is necessary with the option of examining the witnesses present, if any. This exercise by the Magistrate, for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused, is nothing but an inquiry envisaged under Section 202 of the Code." 19. In 2018(3) AICLR 625(Cal.), S.S. Binu vs. State of West Bengal (Cal.), the court held:- "100. To sum up, the reference made by the Learned Single Judge on the five issues are answered as follows:- I. According to the settled principles of law, the amendment of sub-section (1) of Section 202 Cr.P.C. by virtue of Section 19 of the Crimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under section 192, may, if he thinks fit, [and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction] postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made,-- (a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or (b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200. (2) In an inquiry under sub- section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath: Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Magistrate receiving a complaint is set out in Section 202 CrPC and there is an obligation on the Magistrate to find out if there is any matter which calls for investigation by a criminal court. The scope of enquiry under this section is restricted only to find out the truth or otherwise of the allegations made in the complaint in order to determine whether process has to be issued or not. Investigation under Section 202 CrPC is different from the investigation contemplated in Section 156 as it is only for holding the Magistrate to decide whether or not there is sufficient ground for him to proceed further. The scope of enquiry under Section 202 CrPC is, therefore, limited to the ascertainment of truth or falsehood of the allegations made in the complaint: (i) on the materials placed by the complainant before the court; (ii) for the limited purpose of finding out whether a prima facie case for issue of process has been made out; and (iii) for deciding the question purely from the point of view of the complainant without at all adverting to any defence that the accused may have." 29. In Mehmood Ul Rehman v. Khazir Mohammad Tunda and Others (2015) 12 SCC 420, the scope of en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the averments in the complaint that constitutes cognizance. At this stage, the Magistrate has to be satisfied whether there is sufficient ground for proceeding and not whether there is sufficient ground for conviction. Whether the evidence is adequate for supporting the conviction can be determined only at the trial and not at the stage of enquiry. If there is sufficient ground for proceeding then the Magistrate is empowered for issuance of process under Section 204 of the Code." 31. Under the amended sub-section (1) to Section 202 Cr.P.C., it is obligatory upon the Magistrate that before summoning the accused residing beyond its jurisdiction, he shall enquire into the case himself or direct the investigation to be made by a police officer or by such other person as he thinks fit for finding out whether or not there is sufficient ground for proceeding against the accused. 32. By Cr.P.C. (Amendment) Act, 2005, in Section 202 Cr.P.C. of the Principal Act with effect from 23.06.2006, in sub-section (1), the words "…and shall, in a case where accused is residing at a place beyond the area in which he exercises jurisdiction…" were inserted by Section 19 of the Crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of Oman v. Barakara Abdul Aziz and Another (2013) 2 SCC 488. 34. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. The application of mind has to be indicated by disclosure of mind on the satisfaction. Considering the duties on the part of the Magistrate for issuance of summons to accused in a complaint case and that there must be sufficient indication as to the application of mind and observing that the Magistrate is not to act as a post office in taking cognizance of the complaint, in Mehmood Ul Rehman, this Court held as under:- "22. ….the Code of Criminal Procedure requires speaking order to be passed under Section 203 Cr.P.C. when the complaint is dismissed and that too the reasons need to be stated only briefly. In other words, the Magistrate is not to act as a post office in taking cognizance of each and every complaint filed before him and issue process as a matter of course. There must be sufficient indication in the order passed by the Magistrate that he is satisfied that the allegations in the complaint constitute an offence and when considered along with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and that as a matter of course, the criminal case against a person cannot be set into motion was reiterated in GHCL Employees Stock Option Trust v. India Infoline Limited (2013) 4 SCC 505. 36. To be summoned/to appear before the Criminal Court as an accused is a serious matter affecting one's dignity and reputation in the society. In taking recourse to such a serious matter in summoning the accused in a case filed on a complaint otherwise than on a police report, there has to be application of mind as to whether the allegations in the complaint constitute essential ingredients of the offence and whether there are sufficient grounds for proceeding against the accused. In Punjab National Bank and Others v. Surendra Prasad Sinha 1993 Supp (1) SCC 499, it was held that the issuance of process should not be mechanical nor should be made an instrument of oppression or needless harassment. 37. At the stage of issuance of process to the accused, the Magistrate is not required to record detailed orders. But based on the allegations made in the complaint or the evidence led in support of the same, the Magistrate is to be prima facie satisfied that there are sufficient grounds for proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which no action need be taken. The law imposes a serious responsibility on the Magistrate to decide if there is sufficient ground for proceeding against the accused. The issuance of process should not be mechanical nor should be made as an instrument of harassment to the accused. As discussed earlier, issuance of process to the accused calling upon them to appear in the criminal case is a serious matter and lack of material particulars and non-application of mind as to the materials cannot be brushed aside on the ground that it is only a procedural irregularity…………….." 22. Thus it is clear that Section 202 Cr.P.C. makes it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall inquire into the case himself or direct investigation to be made by a Police Officer or by such other person as he thinks fit, for finding out whether or not there is sufficient ground for proceeding against the accused. 23. In the present case only the complainant has been effectively examined under Section 202 Cr.P.C., who has stated about the facts/offences alleged in the present case. The deposition of the sole witnes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onth 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:] Section 271C of the Act 271C. Penalty for failure to deduct tax at source. (1) If any person fails to-- (a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB; or (b) pay the whole or any part of the tax as required by or under,-- (i) sub-section (2) of Section 115O; or (ii) the second proviso to Section 194B; then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.] (2) Any penalty imposable under sub section (1) shall be imposed by the Joint Commissioner. Section 273B of the Act 273B. Penalty not to be imposed in certain cases.--Notwithstanding anything contained in the provisions of clause (b) of subsection (1) of Section 271, Section 271A 4203[Section 271 AA], Section 271B 4204[Section 271 BA], 4205[Section 271 BB, 4206[Section 271C, Section 271 CA], Section 271D, Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) are very clear and the relevant words used are "fails to deduct." It does not speak about belated remittance of the TDS. As per settled position of law, the penal provisions are required to be construed strictly and literally. As per the cardinal principle of interpretation of statute and more particularly, the penal provision, the penal provisions are required to be read as they are. Nothing is to be added or nothing is to be taken out of the penal provision. Therefore, on plain reading of Section 271C of the Act, 1961, there shall not be penalty leviable on belated remittance of the TDS after the same is deducted by the assessee. Section 271C of the Income Tax Act is quite categoric. Its scope and extent of application is discernible from the provision itself, in unambiguous terms. When the non deduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVIIB would invite penalty under Clause 271C(1)(a); only a limited text, involving sub-section (2) of Section 115O or covered by the second proviso to Section 194B alone would constitute an instance where penalty can be imposed in terms of Section 271C(1)(b) of the Act, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the first part of the default, i.e., failure to deduct tax at source should be made liable to levy of penalty, while the second part of the default, i.e., failure to pay the tax deducted at source to the Government which is a more serious offence, should continue to attract prosecution. The Amending Act, 1987 has accordingly inserted a new Section 271C to provide for imposition of penalty on any person who fails to deduct tax at source as required under the provisions of Chapter XVIIB of the Act. The penalty is of a sum equal to the amount of tax which should have been deducted at source. On fair reading of said CBDT's circular, it talks about the levy of penalty on failure to deduct tax at source. It also takes note of the fact that if there is any delay in remitting the tax, it will attract payment of interest under Section 201(1A) of the Act and because of the gravity of the mischief involved, it may involve prosecution proceedings as well, under Section 276B of the Act. If there is any omission to deduct the tax at source, it may lead to loss of Revenue and hence remedial measures have been provided by incorporating the provision to ensure that tax liability to the said ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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