Orissa High Court
973) vs Union Of India ……. Opposite Party on 23 December, 2024
THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.2010 of 2021
(In the matter of an application under Section 482 of the Criminal Procedure Code,
1973)
Jaswant Singh ....... Petitioner
-Versus-
Union of India ....... Opposite Party
For the Petitioners : Mr. Sidhartha Ray, Senior Advocate
For the Opp. Party : Mr. Avinash Kedia, Jr. Standing Counsel
(Income Tax)
CORAM:
THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA
Date of Hearing: 11.09.2024 :: Date of Judgment: 23.12.2024
S.S. Mishra, J.
1. The present Petition is filed by the petitioner under Section 482
Cr.P.C. seeking quashing of the order dated 30.10.2017 passed by the
learned Additional Chief Judicial Magistrate (Special Court), Cuttack in 2
(C) C.C. Case No.241 of 2017, whereby the learned Court below has
taken cognizance of offence punishable under Section 276(B) of the I.T.
Act against the petitioner.
2. The petitioner is one of the Directors of M/s. Braj Mining
Corporation Private Limited. The Commissioner of Income-Tax (TDS),
Bhubaneswar issued a show-cause notice dated 02.06.2017 to M/s. Braj
Mining Corporation Private Limited inter alia calling upon to show cause
as to why prosecution under Section 276(B) of the I.T. Act (for short <the
Act=) shall not be launched against the company and its Directors for
having failed/defaulted in depositing the TDS amount of Rs.13,18,732/-
within the statutory period. The Revenue has alleged that the petitioner
has caused delay in depositing the TDS amount for the financial year
2013-14 ranging from 03 to 12 months. Hence, show cause notice was
issued to the petitioner. The Managing Director of the company namely
Mr. Deependra Bahadur Singh had died on 14.10.2019. Therefore, the
petitioner being the company has been prosecuted. The petitioner-
company vide its reply to the show cause notice on 04.08.2017 inter alia
replied explaining the delay:-
<(2)That, Assessee is doing his business in a remote area of
Odisha in the mining sector, which has gone through severalPage 2 of 21
hurdles during the period under consideration. Mining at several
mines have stopped due to investigation by several Government
agencies and Commission for irregularity on account of lifting of
ore from mines more than the allowed quota, encroachment of
forest area, violation rule 37 of the Mines and Minerals
(Development and Regulation) Amendment Act, 2015 and several
such factors. Bad roads and local politics have further affected
the mining activity in the area. In such a condition survival of a
mining contractor becomes difficult for the reason that,a. Number of mines where activity of mining carried
out got reduced as several mines were closed for
operation due to several Government restrictions and
sanction.
b. Level of operation (quantitatively) got reduced
further reducing the source of income for contractors.
c. All the above points reduced the work quantity for
the same number of contractors available thereby
affecting the business of the contractors.
d. Mine owner used such situation to their advantage
by reducing the price of work (cutting the margin of the
contractor) and delaying the payment against service
provided.
e. There was tremendous pressure from the mine
owners to expedite the execution of contracts allotted to
the assessee. Assessee succumbed to the pressure of mine
owners as there was revenue required to meet the fixed
cost. In the process it engaged local transporters and
petty contractors to expedite the execution of work. The
demand and pressure from them for the payment was
also enormous.
3. That, Survival of assessee in the tough situation with huge
amount of investment in fixed cost, delay in payment by the
contractee and the pressure of payment to the creditors compelled
the delay in TDS deposit. Even it became the difficult to collect
the outstanding amount from the mine owners. The total sundry
debtors as on 31st March 2014 is at Rs.14,41,79,755 with a
turnover of Rs.65,68,41,080 which is around 21% of the gross
revenue. For the better appreciation of the facts herewith we are
enclosing the copy of the audited financial statements of the
assessee.
Page 3 of 21
4. That, the assessee is a law abiding company and has tried its
best to comply the law. Accordingly, it has deposited the TDS
along with the interest whenever it got an opportunity to do so.
Although the TDS has been deducted could not be deposited in
time to the credit of the Central Govt. Account. However being a
bonafide assessee the company had discharged its TDS liability
much before of issuance of notice.=
3. The company in which the petitioner is the Director has contended
in the reply to the show cause notice that due to sufficient reasons as
mentioned above, they could not deposit the TDS amount within
stipulated period. The petitioner further urged that by accepting the
reasons of delay in depositing and by giving the benefit of 278AA of the
Act, the prosecution may not be launched against the assessee,
company/petitioner.
4. Without considering the caused shown by the petitioner-company,
the Revenue went ahead with the prosecution and instituted 2(C)C.C.
Case No.241 of 2017 on 25.10.2017. The learned Court below has taken
cognizance of the offence against the petitioner by the impugned order
dated 30.10.2017. Hence, the petitioner being one of the Directors of M/s.
Braj Mining Corporation Private Limited, the assessee, has filed the
Page 4 of 21
present petition on 27.10.2021 assailing the order of cognizance passed
by the learned Court below.
5. Heard Mr. Ray, learned Senior Counsel for the petitioner and Mr.
Avinash Kedia, learned Junior Standing Counsel for the Income Tax
Department.
6. Mr. Ray, learned Senior Counsel for the petitioner submitted that
the petitioner has sufficiently explained the reasons for not being able to
deposit the TDS amount within time. He contended that the petitioner-
company in his show-cause reply had adequately explained the cause of
delay of about 03 months to 12 months, in depositing the T.D.S. amount.
However, the Income Tax Authority has discarded the sufficient cause
and by declining to give the benefit of Section 278AA of the Income Tax
Act, proceeded against the petitioner. Learned Senior Counsel has
empathetically relied upon the provision of Section 278AA of the Act,
which reads as under:-
<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.=Page 5 of 21
On the strength of the aforementioned provision, he contended that<reasonable cause= shown by the assessee in its reply to the show cause
notice ought to have been taken into consideration, however, the Revenue
without application of mind has launched the prosecution against the
petitioner.
7. Mr. Ray, learned Senior Counsel has strongly relied upon the
judgment of this Court dated 15.04.2024 passed in CRLMC No.1921 of
2023 in the case of Sree Metaliks Limited and others vs. Union of
Indian and another. He has relied upon the following paragraphs of the
said judgment:-
<5. My Ray, learned Senior Counsel to begin with has relied upon
a Circular No F No 285/90/2008-IT(Inv-I)/05 dated 24.04.2008
and contended that the benefit of the said Circular ought to have
been extended to the petitioners. The relevant part of the Circular
reads as under:-
<Subject:- Streamlining of procedure for identification and
processing of case for prosecution under Direct Tax Laws-
matter reg.-
xxx xxx xxx xxx xxx
2. xxx xxx xxx xxx xxx
3. Identification and processing of potential prosecution
cases:
3.1 The following categories of offences shall be processed
for launching prosecution:-
(i) Offences u/s 276B: Failure to pay taxes deducted at
source to the credit of Central Government
Cases, where amount of tax deducted is Rs.25,000
or more, and the same is not deposited even within 12
months from the date of deduction, shall be processed forPage 6 of 21
prosecution in addition to the recovery steps as may be
necessary in such cases.
The authority for processing the prosecution under
this section shall be the officer having jurisdiction over
TDS cases. The prosecution shall preferably be launched
within 60 days of such detection. If any such default is
detected during search/survey, the processing ADIT/DDIT
or the authorized officer shall inform the A.O having
jurisdiction over TDS forthwith.=
6. Mr. Ray, learned Senior Counsel to buttress his
aforementioned argument, relied upon the judgment of the
Jharkhand High Court in the case of Dev Multicom Pvt. Ltd. and
another vs. State of Jharkhand and another reported in [2023]
454 ITR 48 (Jharkhand). The relevant portion of the said
judgment reads as under:
<The amount has already been deposited with interest and
there is no reason why the criminal proceeding shall
proceed and the criminal proceeding was launched after
receiving the said amount with interest, had it been a case
that the case was immediately instituted and thereafter the
tax deducted at source amount has been deposited with
interest, the matter would have been different. As such the
continuation of the proceedings will amount to an abuse of
the process of the Court.
Accordingly, the entire criminal proceedings and the
cognizance orders in their respective cases, passed by the
learned Special Economic Offices, Dhanbad, in the
respective C. O. cases, whereby cognizance has been taken
against the petitioners for the offences under sections 276B
and 278B of the Income-tax Act, pending in the court of the
learned Special Judge, Economic Offences, Dhanbad, are
hereby, quashed.=
7. Mr. Ray, learned Senior Counsel has also relied upon the
judgment of our own High Court in the case of M/s. D.N. Homes
Pvt. Ltd., Khurda and another vs. Union of India passed in
CRLREV No.408 of 2023, the relevant paragraphs of which
reads as under:
<20. The legislative intent would be well discernable
when simultaneously, we glance at the provision of
section 201 and 221 of the IT Act which says that penalty
is not leviable when the Company proves that the default
was for 8good and sufficient reasons9, whereas, the
expression used in section-278AA is 8reasonable cause9.
The legislature has carefully and intentionally used these
different expressions in the situations envisaged under
those provisions.
Page 7 of 21
22. Coming to the case before us, the prosecution has
been launched against the petitioners for delay in deposit
of the 6 Page 6 of 8 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 dispute that the petitioners have by
the time of consideration of the matter as to launching of
the prosecution for such delayed deposit, had deposited
the entire TDS with the interest as they were liable to pay
as per this statutory provision for such delayed deposit of
the TDS. The collected TDS with interest as above has
been accepted and gone to the State Exchequer when by
then no loss to the Revenue was standing to be viewed.=
8. Mr. Ray submits that in the instant case also the opposite
parties have accepted the delayed interest on the TDS amount as
per the provision of law and after receiving the TDS amount
along with interest initiated the Criminal Prosecution against the
petitioners. Therefore, the criminal prosecution launched against
the petitioners is not sustainable under law as has been
authoritatively held by our own High Court and the High Court of
Jharkhand. Apart from that the petitioners are entitled to be
exempted for criminal prosecution under the Departmental
circular dated 24.04.2008 Therefore, he seeks 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, 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
Page 8 of 21
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 to the revenue account
have been well explained by the petitioners, therefore, the
authorities ought to have been taken into consideration same,
particularly for the reasons that the petitioners/company has
suffered the I.B. proceeding and the restriction imposed during
the COVID-19 pandemic, I am of the view that the petitioners
case is directly covered by the judgments cited in the case of Dev
Multicom Pvt. Ltd. (supra) and M/s. D.N. Homes Pvt. Ltd.
Khurda & another (supra), because the prosecution indeed has
been initiated by the opposite parties against the petitioners after
having received the TDs amount along with the interest.
Therefore, the entire proceeding arising out of 2(c) CC Case
No.09 of 2023 pending in the Court of the learned Additional
Chief Judicial Magistrate (Spl.)-cum-Asst. Sessions Judge,
Cuttack and the consequential proceedings arising therefrom qua
the petitioners stands quashed.=
8. Mr. Ray, learned Senior Counsel also contended that the
aforementioned view of this Court has been confirmed by the Hon’ble
Supreme Court while dismissing the Special Leave Petition. He has relied
upon the order dated 11.07.2024 passed by the Hon’ble Supreme Court in
Special Leave Petition (Criminal) Diary No(s).23438 of 2024 in the case
of Union of India vrs. M/s. D.N. Homes Pvt. Ltd. & Anr., which reads as
under:-
Page 9 of 21
<Delay condoned.
We are not inclined to interfere with the impugned judgment
and order of the High Court. The Special Leave Petition is,
accordingly, dismissed.=Mr. Ray, submitted that since the view of this Court has been
affirmed by the Hon’ble Supreme Court and the present case is squarely
covered by the aforementioned judgment of this Court, the present
petition deserves merit and liable to be allowed.
9. Per contra, Mr. Avinash Kedia, learned Jr. Standing Counsel for
the Income Tax Department submitted that the petitioner being the
Director of the accused-company namely M/s. Braj Mining Corporation
(P) Ltd., who is the principal officer and accountable/responsible for the
day to day affairs of the company as per the provisions of Section 2(35)
of the Income Tax Act, 1961. The petitioner was obliged to comply with
the provisions of the Income Tax Act, 1961 on behalf of the accused-
company. He further submitted that on the basis of the system generated
statement retrieved from the portal i.e. TDS Reconciliation Analysis and
Correction Enabling System (in short referred as <TRACES=), the
petitioner deducted TDS of Rs.11,41,397/- for the financial year 2013-14,
but, did not deposit the said TDS amount into the Central Government by
Page 10 of 21
the due dates. The petitioner withheld the government due so deducted
from TDS and deposited the said amount with delay of 03-12 months,
which amounts to an offence under Section 276B of the I.T. Act, 1961.
10. Mr. Kedia, learned counsel further submitted that the petitioner
was required to deposit the TDS amount as per Rule 30 of the Income
Tax Rules, 1962 and in accordance with the provisions of Chapter-XVII-
B into the Central Government Account by 7th of next month and if the
TDS is deducted for the month of March, the same should be deposited
by 30th of April of the next financial year. In the present case, as per the
computerized statement of TDS in respect of Form-26Q, there has been
delay in deposit of TDS amount of the Central Government Account for a
period ranging from 03 to 12 months.
11. Mr. Kedia, further submitted that the Revenue had issued show
cause notice to the petitioner calling upon to explain as to why the
criminal prosecution shall not be lodged against the petitioner. The reply
submitted by the assessee was completely dissatisfactory. Therefore,
rightly the proceeding was initiated. He has submitted that it is an
admitted case on facts that the delay has indeed been caused by the
Page 11 of 21
assessee in depositing the TDS amount with the Revenue. The statutory
provision commands a prosecution lodged against the defaulting cases.
He contended that in a taxing statute, there is no room for any
intendment; nothing is to be read as implied. The language employed in
the statute has to be strictly followed. Since Section 276B of the Act
prescribed prosecution for delayed deposit of TDS amount, there was no
other option left for the Revenue rather to launch the prosecution against
the petitioner. He emphasized the provisions relatable to the prosecution
launched against the petitioner, which reads as under:-
<That for better appreciation, the relevant provisions of the Section
276B & 278B of the IT Act, 1961 and relevant portion of Rule 30 are
quoted below:-
“276B. If a person fails to pay 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 32 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.=“278B. Offences by companies. (1) Where an offence under this Act
has been committed by a company, every person who, at the time the
offence was committed, was in charge of, and was responsible to, the
company for the conduct of the business of the company as well as
the company shall be deemed to be guilty of the offence and shall be
liable to be proceeded against and punished accordingly:
Page 12 of 21
Provided that nothing contained in this sub-section shall render any
such person liable to any punishment if he proves that the offence
was committed without his knowledge or that he had exercised all
due diligence to prevent the commission of such offence.
Xxxxx xxxxxxx xxxxxxxx
(3) Where an offence under this Act has been committed by a person,
being a company, and the punishment for such offence is
imprisonment and fine, then, without prejudice to the provisions
contained in sub-section (1) or sub-section (2), such company shall
be punished with fine and every person, referred to in sub-section
(1), or the director, manager, secretary or other officer of the
company referred to in sub-section (2), shall be liable to be
proceeded against and punished in accordance with the provisions
of this Act.
Explanation- For the purposes of this section-
(a) <company= means a body corporate, and includes:-
(i) a firm; and
(ii) an association of persons or a body of individuals
whether incorporated or not;
(b) <director=, in relation to-
(i) a firm, means a partner in the firm;
(ii) any association of persons or a body of
individuals, means any member controlling the affairs
thereof.
(emphasis supplied)
<Rule 30. Time and mode of payment to Government account of
tax deducted at source or tax paid under sub-section (1A) of
section 192:
(1) All sums deducted in accordance with the provisions of
Chapter XVII-B by an office of the Government shall be paid to
the credit of the Central Government- (a) on the same day where
the tax is paid without production of an income-tax challan9 and
(b) on or before seven days from the end of the month in which
the deduction is made or income-tax is due under sub-section
(1A) of section 192, where tax is paid accompanied by an income-
tax challan.
(2) All sums deducted in accordance with the provisions of
Chapter XVII-B by deductors other than an office of the
Page 13 of 21
Government shall be paid to the credit of the Central
Government- (a) on or before 30th day of April where the income
or amount is credited or paid in the month of March; and(b) in
any other case, on or before seven days from the end of the month
in which-(i) the deduction is made; or (ii) income-tax is due under
sub-section (1A) of section 192.=
xxxxxxx xxxxxxx xxxxxxx
12. To buttress his argument, Mr. Kedia, has relied upon the judgment
of the Hon’ble Supreme Court in the case of Madhumilan Syntax vrs.
Union of India reported in (2007) 11 SCC 297. The Hon’ble Supreme
Court in that case has held as under:-
<27. From the above provisions, it is clear that wherever a
Company is required to deduct tax at source and to pay it to the
account of the Central Government, failure on the part of the
Company in deducting or in paying such amount is an offence
under the Act and has been made punishable. It, therefore, cannot
be said that the prosecution against a company or its Directors in
default of deducting or paying tax is not envisaged by the Act.
43. From the statutory provisions, it is clear that to hold a person
responsible under the Act, it must be shown that he/she is a
8principal officer9 under Section 2(35) of the Act or is 8in charge
of9 and 8responsible for9 the business of the Company or Firm. It is
also clear from the cases referred to above that where necessary
averments have been made in the complaint, initiation of criminal
proceedings, issuance of summons or framing of charge, cannot be
held illegal and the Court would not inquire into or decide
correctness or otherwise of the allegations leveled or averments
made by the complainant. It is a matter of evidence and an
appropriate order can be passed at the trial.
44. In the case on hand, in the show cause notice dated March 11,
1991 issued under Section 276b read with Section 278B of the Act,
it was expressly stated by the Income Tax Officer, TDS, Bhopal that
the Directors were considered to be Principal Officers under
Section 2(35) of the Act. In the complaint dated February 26, 1992Page 14 of 21
filed by the respondent No.2-Commissioner also, it was stated that
appellants were considered as Principal Officers. In the above view
of the matter, in our opinion, contention of the learned counsel for
the appellants cannot be accepted that the complaint filed against
the appellants, particularly against appellant Nos.2-4 is ill-founded
or not maintainable.
46. In view of the aforesaid discussion, the sanction to prosecute
granted by the second respondent cannot be held illegal or
unlawful nor the complaint can be held bad in law.
47. 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 300. Interpreting the provisions of Section 276B, a
Single Bench of High Court observed that:-
<there is no provision in the Income Tax Act
imposing criminal liability for delay in deduction
or for non-payment in time. Under Section 276B,
delay in payment of income tax is not an
offence.=
According to the learned Judge, such a provision
is subject to penalty under Section 201(1) of the
Act.
48. We are unable to agree with the above view of the High Court.
Once a statute requires to pay tax and stipulates period within
which such payment is to be made, the payment must be made
within that period. If the payment is not made within that period,
there is default and an appropriate action can be taken under the
Act. Interpretation canvassed by the learned counsel would make
the provision relation to prosecution nugatory.
49. The learned counsel is right in stating that one of the appellants
is a female-member. The counsel is also right in contending that in
some of the cases referred to by him, this Court held that normally
a lady member may not be aware of day to day business of the Firm
or the Company. Without laying down general rule, it would be
sufficient if we observe that in the case on hand, she was also
treated as 8principal officer9 under the Act and hence proceedings
cannot be dropped at this stage against her.
Page 15 of 21
50. As to contention that the case is squarely covered by Section
278AA of the Act and that no offence has been committed in view of
8reasonable cause9 shown by the appellants, we may state that the
question can be decided on the basis of evidence which would be
adduced by the parties before a competent Court. Hence, even that
contention, does not detain us.
51. It is true that the Act provides for imposition of penalty for non-
payment of tax. That, however, does not take away the power to
prosecute accused persons if an offence has been committed by
them. A similar contention was raised before this Court in Rashida
Kamaluddin Syed & Anr. v. Shaikh Saheblal Mardan (2007) 3 SCC
548, that since a civil suit was filed for recovery of amount, no
criminal proceedings could have been initiated. Negating the
contention, one of us (C.K. Thakker, J.) stated;
27. Finally, the contention that a civil suit is filed by
the complainant and is pending has also not
impressed us. If a civil suit is pending, an appropriate
order will be passed by the competent Court.=
That, however, does not mean that if the accused have committed
any offence, jurisdiction of criminal court would be ousted. Both
the proceedings are separate, independent and one cannot abate or
defeat the other.=
He has also relied upon the judgments of other High Courts on the
same point.
13. I have given a careful consideration to the submission made by
learned counsel for the petitioner as well as the Revenue. This Court has
put a query to learned counsel appearing for the Revenue as to whether
any deductee has complained regarding non-deposit of TDS amount. This
question was put on the premises that the petitioner-company, the
Page 16 of 21
assessee, has admittedly deposited the TDS amount along with interest
with the Revenue. Therefore, there is no financial loss caused to the
Revenue. However, truly the only aggrieved persons are the deductee
those who could not avail the benefit of the TDS deduction from their
source due to non-deposit of the same by the deductor within time. To
answer these queries, learned counsel for the Income Tax Department has
stated as under:-
<……………..The contractors are situated in different parts
across the country and falls under different jurisdictional
ITOs and there is no centralized unit. Furthermore the
provisions of Income Tax Act & Rules do not provide any
mechanism/system for the deductee to raise or lodge a
complaint against the deductee for late deposit of TDS. No
such statutory form, help desk or grievance cell is available
to entertain or redress such grievance. As such, there is no
scope for the deductee to raise such a plea.=
14. The aforementioned answer is not specific rather evasive, which
leads to only inference that there is no complaint received on behalf of
any deductees making any grievance. Notwithstanding the present
proceeding being initiated by the Revenue, if any of the deductees is
aggrieved, he/she has remedy under general law/common law to
prosecute the assesses, who has although deducted the tax from the
Page 17 of 21
source but has deposited belatedly, as a result of which, the tax benefit
could not be availed by the said deductees.
15. This is an admitted case on facts, the assessee has caused delay
ranging from 03 to 12 months in depositing the TDS amount. However,
the TDS amount was deposited belatedly with interest. The Revenue after
accepting the TDS amount with interest has issued show cause notice, to
which the petitioner has adequately replied by explaining the <sufficient
reasons= which unavoidingly prevented from depositing the amount
timely. The assessee could have availed the benefit of Section 278AA of
the Act if the sufficient reasons explaining the delay were taken into
consideration. The Commissioner of Income Tax (TDS) has out rightly
rejected the cause explained by the assessee regarding the delay. It
appears from the record that the competent authority of the Revenue has
not even delved upon the <sufficient cause= shown by the assessee
explaining the delay.
16. Mr. Kedia, learned counsel for the Revenue has also read out
extensively the sanction order dated 13.09.2017 passed by the
Commissioner of Income Tax (TDS), Bhubaneswar. He contended that
Page 18 of 21
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 contention of the petitioner is disputed questions of facts. This
could only be thrashed out at the trial stage. Hence, the prayer made by
the petitioner in the present petition deserves no merit. Even otherwise
the offences are compoundable, hence the petitioner 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 for such period. For the purposes
of considering the quantum of TDS defaults, the total default on
account of non-payment of TDS/TCS for a quarter shall be
considered by combining the defaults in all the statements filed by the
TDS deductor, in respect of the relevant quarter.
Page 19 of 21
8.3 In case an applicant files Compounding application for offences
committed u/s 276B/276BB of the Act, in respect of two or more TANs
falling in two or more jurisdictions, the jurisdictional authority where
the quantum of TDS default is higher shall be the Competent
Authority. All other applications shall be transferred to such
Competent Authority. Further, in case of any dispute in deciding
Competent Authority, the Pr. CCIT having PAN jurisdiction will
decide Competent Authority, within 30 days of receipt of such
reference.=On the strength of the aforementioned Circular, Mr. Kedia,
submitted that since the Department has now formulated a guideline for
compounding the offences punishable under Sections 276B/276BB of the
I.T. Act, the inherent jurisdiction of this Court under Section 482 Cr.P.C.
is forbidden for such offenders against whom, prosecution has been
launched for the said offences.
17. I have given a careful consideration to the submissions made by the
parties at the Bar and perused the documents placed before this Court.
Perusal of the Circular dated 17.10.2024 issued by the CBDT makes it
abundantly clear that the Department has 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 as reproduced above clearly deals
with the offences for which the petitioner is sought to be prosecuted in
2(C) C.C. Case No.241 of 2017. Therefore, in the present regime, where
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the compounding of the offence is permissible, the jurisdiction of this
Court under Section 482 Cr.P.C. may not be necessarily invoked by the
petitioner. In that view of the matter, the petitioner may resort to the
procedural remedy under Section 320 Cr.P.C. by relying upon the
Circular dated 17.10.2024 and seek for compounding of the offences
complained off against him by the Revenue in the 2(C) C.C. Case No.241
of 2017. Mr. Kedia, learned Junior Standing Counsel for the Income Tax
precisely submits the same.
18. In view of the same, the petitioner is granted liberty to approach
the learned trial Court under the appropriate provision of law for
compounding of the offence by relying upon the Circular dated
17.10.2024 issued by the CBDT. If such application is moved before the
Court below, the same shall be considered on its merit without being
influenced by the observation of this Court in the present order.
19. The CRLMC is, accordingly, partly allowed with liberty as
mentioned above.
………………
S.S. Mishra
(Judge)
Signature Not Verified
The High Court of Orissa, Cuttack
Dated the 23rd December, 2024/ Swarna
Digitally Signed
Signed by: SWARNAPRAVA DASH
Reason: Authentication
Location: High Court of Orissa
Date: 10-Jan-2025 18:04:54 Page 21 of 21