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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 ..... S 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 deposited by the petitioners in the Government account belatedly delayed ranging from 1 day to 84 days. Therefore, they have allegedly committed the offences punishable under Sections 276B and 276BB of the I.T. Act. The petitioners were issued show cause notice under Section 279 (1) read with Section 276B and Section 276BB of the I.T. Act on 08.02.2023 calling upon them to explain the delay in depositing the amount collected from different sources towards TDS and TCS. The petitioners vide separate reply dated 01.03.2023 have given the following explanation: "2. That the notice wish to state that the assessee company Kashvi International (P) Ltd. which was granted lease of Jaribahal iron ore mines in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees 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 (1) of the I.T. Act, 1961 vide its order dated 09.05.2023. The said sanction order is placed at Annexure-3 to this petition. Perusal of the sanction order reveals that the competent authority although has taken into consideration some of the explanation offered by the petitioners to explain the sufficient reason for delay in depositing the TDS amount, but the vital aspect of the explanation offered by the petitioners regarding the cause of delay attributable to the COVID restriction has not been considered. Be that as it may, after obtaining sanction from the competent authority through the Public Prosecutor, the complaint case being 2(C)C.C. Case No.47 of 2023 has been lodged against the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 2020. However, the delay in remittance is not limited to that period. Mr. Mohapatra further contends that the Circular dated 24.04.2008 relied upon by the petitioners will not come to their aid because the delay is beyond one year. The petitioners could have escaped the prosecution, had the delay been within a period of 12 months. In that view of the matter, the sanction accorded by the competent authority under section 279 (1) of the Act cannot be faulted with. 10. Taking into consideration the rival contentions of learned counsels for the parties and the judgments relied upon by the petitioners, I am of the considered view that the maximum delay of 394 days for depositing the TDS amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 contained in the I.T. Acts and Rules in relation to the deposit of the TDS. 22. Coming to the case before us, the prosecution has been launched against the Petitioners for delay in deposit of the collected TDS for the Financial Year, 2020-21 (Accounting Year, 2021-22). The collected TDS was admittedly not deposited with the Central Government by the due date. The Petitioners thus have failed to deposit the collected TDS within the time stipulated as ordained under provision of the I.T. Act and Rules. They have deposited the said amount in phase manner with the delay in making the deposit which begins with the minimum of 31 days, ending at 214 days. It is not in disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 day expenditure, day to day monitoring, day to day change in priorities and day to day change in the methods and modalities to deal with the same. 24. It goes without saying that COVID-19 Pandemic has caused serious economic disruption. However, the Government both at Central and State level have made herculean efforts to deter it from becoming a matter of economic distress. In order to contain and arrest, the sporadic/rapid spread of the Virus, there have been frequent lock downs, shut downs, declaration of contentment zones, total ban on some activities, partial allowance of in some specific activity and even re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt 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 CBDT, which provides fresh guidelines for compounding of offences under the I.T. Act. This Circular harmonized the entire procedure for compounding all kinds of offences under the I.T. Act arising out of curable defects. Clauses 4.6 and 8.3 of the said Circular deal with the offences under Sections 276B/276BB of the Act, those clauses are reproduced for ready reference: "4.6 Consolidation of offences: Any application for compounding of offence u/s.276B/276BB of the Act by an applicant for any period for a particular TAN should cover all defaults constituting offence u/s 276B/276BB in respect of that TAN ..... X X X X Extracts X X X X X X X X Extracts X X X X
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