9911796707
TMI Blog2024 (6) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... ry look at the proceedings of the learned Commissioner would show that the Petitioners have not furnished any information to buttress their contention that because of the delay in grant of fee reimbursement by the Government of Andhra Pradesh, they could not remit the amount to the Central Government Account within time. As decided in M/s US Technologies International Pvt. Ltd. [ 2023 (4) TMI 418 - SUPREME COURT ] on interpretation of Section 271C which is a penal provision, it is clear that on mere belated remittance, no penalty shall be leviable. In the course of the judgment, the Hon ble Apex Court also referred to various other provisions including Section 276-B and observed that the consequences of consequences on non-payment/belated remittance of the TDS would be under Section 201(1A) and Section 276B of the I.T. Act. Taking a decision to prosecute any person for violation of the provisions under Section 276B, is subject to Section 278AA of I.T. Act, and when the Petitioners are able to establish the reasonable cause for the delay in remittance of the amount to the Central Government Account though deducted the tax at the source. It is a case of appreciation of a point on fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er show-cause notice to the Accused on 19.12.2016 and having received the same, Accused gave a reply on 20.12.2016, but had not appeared before Respondent No. 2. c. Respondent No. 2 had given final show-cause notice to the Accused on 16.01.2018, for which, the Accused gave an explanation on 30.01.2018. Despite several opportunities, the Accused had not shown sufficient cause for not depositing the amounts. d. As such, Respondent No. 2 filed three private complaints on the file of the Court of IV Additional District Judge-cum-Special Economic Offences Court, Visakhapatnam against the Petitioners/Accused Nos. 1 to 3 and the same were taken on file and numbered as C.C. Nos. 31, 32 and 33 of 2018 respectively. Grounds Sought for Quashment: 4. Being aggrieved by the registration of the said cases, Petitioners/Accused Nos. 1 to 3 filed the present petitions seeking quashment of the proceedings against them on the following grounds; a) Absolutely no case is made out against the Accused, as such, continuation of prosecution against the Petitioners is an abuse of process of law. b) The Petitioners have not committed any offence much less the alleged offence. c) Respondent No. 2 specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted the tax at source, they failed to deposit the same and that the payment is made with interest. It is stated that the show-cause notices have also been issued by the Commissioner of Income Tax and in reply, the Petitioners failed to establish the reasonable cause for the said delay. It is contended that the reason assigned i.e., due to paucity of funds, cannot be considered as a reasonable cause to exonerate the Petitioners from the criminal prosecution. It is stated that the learned Commissioner for Income Tax has rightly taken a decision to launch criminal prosecution against the Petitioners and as such there are no grounds for quashment of the proceedings against the Petitioners and hence, prayed for dismissal of the petitions. Learned Assistant Public Prosecutor conceded to the arguments advanced by the learned counsel for Respondent No. 2. Point for Determination 8. Perused the material available on record. 9. Having heard the submissions of the learned counsel representing both the parties, the point that would emerge for determination is: Whether there are any justifiable grounds for quashment of proceedings against the Petitioners/Accused Nos. 1 to 3 in C.C. Nos. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the credit of the Central Government, (a) the tax deducted at source by him as required by or under the provisions of Chapter XVII-B; or (b) the tax payable by him, as required by or under (i) sub-section (2) of section 115-O; or (ii) the second proviso to section 194B, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. 278AA. Punishment not to be imposed in certain cases. Notwithstanding anything contained in the provisions of section 276A, section 276AB, or section 276B, or section 276BB, no person shall be punishable for any failure referred to in the said provisions if he proves that there was reasonable cause for such failure. 14. The language used in Section 276B of the I.T. Act indicates it is applicable when there is a failure by a person to pay to the credit of the Central Government (i) the tax deducted at source by such person as required under Chapter XVII-B or (ii) the tax payable by such person as required under Section 115-O (2) or second proviso to the Section 194-B of the I.T. Act. 15. It is germane to mention that the Section 278AA begins with a non-obstante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no person shall be punished for such failure, if he proves that there was reasonable cause for such failure. The fact that under section 278AA an accused has to prove that there was reasonable cause for his such failure would go to show that there is presumption in favour of the prosecution that the failure of the assessee was without any reasonable cause otherwise there was no occasion to insert section 278AA in the Act. It is said that if this interpretation is given, the amendment by which the words without reasonable cause or excuse have been omitted from section 276B, becomes redundant. In my view, it cannot be said so. If these words would not have been omitted from section 276B, in that event, the provisions of sections 276B and 278AA would have been conflicting. The prosecutor in such a case would have to prove that the accused had no reasonable cause or excuse for his failure; whereas under section 278AA, an accused was required to prove that there was reasonable cause for such failure. If the prosecution itself failed to prove that the failure was without any reasonable cause or excuse, in that event, there could have been no occasion for the accused to prove that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied) 18. Thereafter, in Sonali Autos Private Limited v. State of Bihar and others (2017) 396 ITR 636, once again a learned Single Judge of the Patna High Court observed as follows; 26. The petitioners have stated in the petition that the aforesaid tax could not be deposited within time due to oversight on the part of the Accountant, who was appointed to deal with the Accounts and Income Tax matters. This mistake was detected at the time of audit of Books of Accounts by the Statutory Auditors of the petitioner company in August, 2010. Thereafter, the petitioner immediately deposited the amount of tax along with interest in the year 2010 itself. Section 278 AA of the Act specifically says that no person shall be punished for any failure referred to under the said provisions if the assessee proves that there was reasonable cause for such failure. Reasonable cause would mean a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bona fides. (emphasis supplied) 19. In the present case, admittedly, Petitioner No. 1 is an Education Institution which is an Engineering College. For better appreciation, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. v. The Commissioner of Income Tax 2023 INSC 329 , wherein the issue that fell for consideration was as to whether in case of belated remittance of TDS after deduction, assessee would be liable to pay penalty under Section 271C of the I.T. Act. The Hon ble Apex Court held that on interpretation of Section 271C which is a penal provision, it is clear that on mere belated remittance, no penalty shall be leviable. In the course of the judgment, the Hon ble Apex Court also referred to various other provisions including Section 276-B and observed that the consequences of consequences on non-payment/belated remittance of the TDS would be under Section 201(1A) and Section 276B of the I.T. Act. 23. Be that as it may, taking a decision to prosecute any person for violation of the provisions under Section 276B, is subject to Section 278AA of I.T. Act, and when the Petitioners are able to establish the reasonable cause for the delay in remittance of the amount to the Central Government Account though deducted the tax at the source. It is a case of appreciation of a point on factual aspect as to the satisfaction of the Authorities on the point of reasonable cause. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
