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TMI Blog2024 (12) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... (Income Tax) Mr. Avinash Kedia, Junior Standing Counsel (Income Tax) S.S. MISHRA, J. 1. By way of this petition, the petitioners are seeking quashing of the order dated 11.08.2023 passed by the learned Additional Chief Judicial Magistrate (Special Court), Cuttack in 2(C) C.C. Case No.47 of 2023, whereby cognizance of offences punishable under Sections 276B/276BB of I.T. Act has been taken and summons have been issued against the petitioners. 2. The respondent-revenue initiated the prosecution by filing complaint case under Section 190 of Cr.P.C. of the alleged offences, cognizance of which has been taken by the learned court below. 3. The allegations against the petitioners are that they have collected TDS and TCS amounts from various sources during the financial year 2021-2022 to the tune of Rs. 1,03,78,362/- but did not deposit the same in the revenue account by the stipulated due date. As per Rule 30 of the I.T. Rules, the tax deducted from source is required to be deposited by 7th day of the succeeding month and if the TDS is made in the month of March, then the said amount is to be deposited by 20th April of the next financial year. In the present case, the TDS amount has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o state that there are about 327 nos. of permanent employees and 428 nos. of casual workers engaged both at the mines and plant of the assessee company. The State Government after realizing the difficulties faced by the mine owners initially had allowed the assessee company to pay the premium amount of Rs. 83.05 Crore in installaments. But subsequently the State Government due its own cash crunch had to withdraw the installments by directing the lessees to pay the whole premium amount at one go. Due to sudden withdrawal of installments by the State Government the cash flow of the assessee was severely affected leading to delay in payment of various dues including TDS as protecting the livelihood of employees had to be given priority particularly in post COVID-19 scenario of joblessness in the country. Thus the delay in deposit of TDS was due to a reasonable cause which was beyond the control of the assessee company. In view of the reasonable cause as explained above, the impugned proceedings in the matter of prosecution u/s 276B in the case of the assessee Company is not in public interest. 4. Pursuant to this notice, the competent authority has accorded sanction under Section 279 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the revenue. The petitioners have also contended that due to the outbreak of COVID-19 pandemic in the month of March, 2020, they could not deposit the TDS amount for the Financial Year 2019-20.Therefore, there is no mense rea involved in the unavoidable act of the petitioner in depositing the TDS amount with the Revenue belatedly. Despite general explanation afforded by the petitioners, the opposite parties have mechanically dealt with those explanations and proceeded to file the statutory complaint against the petitioners. Hence, the petitioners seek, indulgence of this Court. 9. Mr. Mohapatra, learned Senior Standing Counsel appearing for the Income Tax opposed the prayer made by the petitioners and contended that the distress financial condition of the petitioners company and the COVID-19 pandemic situation cannot be taken as an alibi for late deposit of TDS into the Government account, as the amount was collected on behalf of the Government and due diligence was supposed have been taken for depositing the tax amount within the stipulated time frame. Mr. Mohapatra further contends that the COVID-19 pandemic restriction measures were only imposed during the month of March, 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the collected TDS, thereby failing to strictly comply with the provision contained in the provision in Chapter-XVII-B of the IT Act read with the Rule-30 of the I.T. Rules thereunder which is a punishable offence. 18. The above being the crucial distinguishable factual aspect in the cited case of Madhumilan Syntex Ltd. (supra) to that of the case at hand which is being now dealt with, this Court is of the considered view that the prevalence of COVID-19 Pandemic situation in the country, when stands admitted, it would not be impermissible to say that the said factual settings being projected by the Petitioners as the reasonable cause occasioning their failure thus cannot be taken to be the failure falling within the ambit of reasonable cause which cannot be gone into at this stage but to be delved upon only in the trial; more so when that aspect can be judged without even the Petitioners tendering any evidence in support of the same. Therefore, now it stands to be examined as to whether prevalence of the Pandemic COVID-19 situation in the given factual settings of the case at hand was the reasonable cause which had stood on the way of the Petitioners to comply with the provisions co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and third surges. Various steps have been taken by the Union of India, to strategies nations response to COVID-19, a once in a lifetime Pandemic inflicted on the entire world, wherein not just the funds of NDRF and SDRF, but even from the Consolidated Fund of India had been utilized. Specific steps have been taken for ramping up the entire health care infrastructure, preparedness, relief, restoration, mitigation and reconstruction, in a very short time to include:- (a) testing, tracing, treatment and quarantine facilities; (b) augmenting hospital facilities, oxygenated, beds, ventilators, ICU facilities etc; (c) augmentation of health work force and their insurance; (d) augmentation, allocation, supply and transportation of oxygen and other essential drugs; (e) research, development, enhanced production and administration of vaccinations to rapidly cover one of the world s largest eligible population of beneficiaries; (f) ensuring food security to the vulnerable groups; (g) minimizing the adverse impact of large-scale economic disruptions by multipronged approach; and (h) rehabilitation, protection and education of children orphaned due to COVID-19. The situation required day to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the petitioners to explain the delay ranging from 1 day to 84 days owing to the prevailing COVID pandemic then was sufficient explanation. Therefore, the Revenue ought to have considered the same under Section 178AA of the I.T. Act and ought not to have proceeded against the petitioners. 9. Mr. Kedia, learned counsel for the Revenue has vehemently opposed the prayer made by the petitioners on various grounds. He has read out extensively the sanction order dated 09.05.2023 passed by the Commissioner of Income Tax (TDS), Bhubaneswar. He contended that the Commissioner, Income Tax has extensively dealt with all the points raised by the petitioners which have been highlighted in the present petition. The sanction order is just, proper and well within the frame of law. The contentions of the petitioners are disputed questions of facts. This could only be thrashed out at the trial stage. Hence, the prayer made by the petitioners in the present petition deserves no merit. Even otherwise the offences are compoundable, hence the petitioners shall surrender to the trial court jurisdiction and resort to the right remedy. Mr. Kedia hands up a recent Circular dated 17.10.2024 issued by CB ..... X X X X Extracts X X X X X X X X Extracts X X X X
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