Delhi District Court
Ramesh Surapaneni vs Income Tax Office on 30 June, 2025
IN THE COURT OF SH. ABHISHEK GOYAL, ADDITIONAL
SESSIONS JUDGE-03, CENTRAL DISTRICT, TIS HAZARI
COURTS, DELHI
CNR No.: DLCT01-008538-2024
CRIMINAL REVISION No.: 206/2024
RAMESH SURAPANENI,
S/o. Shri. Gandhi,
Director, Age-83 years,
R/o. (presently at) 7830 Capps. Ferry Road,
Douglasville, Georgia-30135,
United States of America. ... REVISIONIST/
PETITIONER
VERSUS
INCOME TAX OFFICE,
Through, Deputy Commissioner of Income Tax,
Circle-73(1), New Delhi,
Aayakar Bhawan, Laxmi Nagar,
Delhi-110092. ... RESPONDENT
Date of filing : 29.05.2024
Date of institution : 31.05.2024
Date when judgment was reserved : 09.04.2025
Date when judgment is pronounced : 30.06.2025
JUDGMENT
1. The present revision petition has been filed under
Sections 397/399 of the Code of Criminal Procedure, 1973
(hereinafter, referred to as ‘Cr.P.C.’) seeking setting aside of the
order dated 06.01.2024 (hereinafter referred to as the ‘impugned
order’), passed by the learned Additional Chief Metropolitan
Magistrate (Special Act)/Ld. ACMM (Special Act), Central, Tis
Hazari Courts, Delhi (hereinafter referred to as the ‘ Ld.
ACMM/Ld. Trial Court’), in case bearing; ‘Income Tax Office v.
M/s. Abir Infrastructure Pvt. Ltd., Ct. Case No. 2918/2023’,
emanating in a complaint proceedings, initiated in terms of the
provisions under Section 200 Cr.P.C. by the Income Tax Office
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 1 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:18:37
+0530
(hereinafter referred to as the ‘complainant/respondent’) for the
offences under Section 276B read with Section 278B/278E and
Section 279 of the Income Tax Act, 1961 (hereinafter referred to
as ‘IT Act‘). Pertinently, by virtue of the impugned order the Ld.
Trial Court took cognizance of the offences under Section 276B
read with Section 278B/278E of the IT Act and directed issuance
of summons against M/s. Abir Infrastructure Private Limited
(hereinafter referred to as the ‘company’) and Sh. Ramesh
Surapaneni (hereinafter referred to as the
‘revisionist/petitioner/managing director of the company’;
hereinafter, the company and the revisionist are collectively
referred to as the ‘accused’).
2. Succinctly, the genesis of the proceedings against the
revisionist was the aforenoted complaint, initiated on behalf of the
respondent by its Deputy Commissioner, Circle-73(1), New Delhi,
asserted to be duly authorized by the respondent to initiate
prosecution against the company and the revisionist by virtue of
sanction dated 29.04.2022, issued under Section 279(1) of the IT
Act. Notably, the said complaint averred the commission of
offences under Section 276B read with Section 278B/278E and
Section 279 of the IT Act by the company and the revisionist for
the Financial Year 2014-15. Notably, under the complaint it has
been inter alia averred that on the basis of report generated from
the ITD System, it was revealed that, though, the accused deducted
tax at source (TDS) under various provisions, amounting to a tune
of Rs. 5,56,50,048/- (Rupees Five Crores Fifty Six Lakhs Fifty
Thousand and Forty Eight only) during the relevant Financial Year
2014-15, however, did not deposit the said tax amount with the
government account within the stipulated period, i.e., on or before
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 2 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:18:42
+0530
07 (seven) days from the end of the month in which the deduction
is made, as per the provisions of IT Act read with Rule 30 of the
Income Tax Rules, 1972 (hereinafter referred to as the ‘IT Rules’).
Correspondingly, it is averred under the complaint that the
company and the revisionist, who was the Managing Director and
In-charge of the company, were the custodians of the government
funds, i.e., TDS amount, so deducted and that it was mandatory on
the part of the company and the revisionist, to deposit the tax so
deducted in the government account, within the statutory
prescribed period of limitation. Consequently, it was proclaimed
under the said complaint that though, it was ascertained from the
ITD System that the accused were deducting the TDS on payments
under the various provisions, however, not depositing the same
into government accounts as per Section 200(1) of the Act,
thereby, deliberately, intentionally and willfully misusing the
same with fraudulent intention to use the said amount either for
personal or business purpose(s). As per the respondent, the delay
in making the payment was a well calculated strategy to defraud
the revenue and use the funds for their personal/business
purpose(s). Consequently, the respondent is asserted to have
issued a notice/Show Cause notice under Section 2(35) of the IT
Act on 06.01.2017 (hereinafter referred to as the ‘Show Cause
Notice/SCN/Notice’) to the accused/revisionist, seeking
explanation as to why the revisionist should not be treated as the
principal officer of the accused for the purpose of prosecution
under Section 276B of IT Act. Relevantly, the said notice is
asserted to have been replied by the company on 23.01.2017 inter
alia affirming that the company’s day-to-day operations were
managed by its Principal Officer and Managing Director, the
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 3 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:18:46
+0530
revisionist herein. Consequently, the complaint further chronicles
that an order under Section 2(35) of the IT Act was passed on
06.03.2107, holding the revisionist as the principal officer and
person, being responsible for the company at the time of
commission of default for the purpose(s) of initiation of the
proceedings in terms of the provisions under Section 276B of the
said enactment. Ergo, under such circumstances, the ten Assessing
Officer of the respondent, proposed for initiation of the
prosecution and forwarded the same to the respondent. Thereafter,
after considering the various details of deductions and delay in
payment of TDS as well as quarterly TDS statement, prima facie
demonstrating that default in payment of the TDS had in fact,
transpired, the company as well as the revisionist were issued
notice/show cause notice under Section 279(1) read with Section
276B of the IT Act vide office notices reference nos. 41 and 42,
dated 10.04.2017; notices reference nos. D-1228 and D-1229,
dated 23.08.2017; notice reference nos. 1888 and 1889, dated
31.10.2017; notices reference nos. 1150 and 1156, dated
31.07.2019; and notices reference nos. 4290 and 4291, dated
26.02.2020.
2.1. Correspondingly, the complaint records that it came
to the notice of the respondent that Corporate Insolvency
Resolution Proceedings (hereinafter referred to as ‘CIRP’) as well
as moratorium were initiated against the company by National
Company Law Tribunal/NCLT on 28.03.2018 Subsequently, vide
order dated 30.01.2019, NCLT, further approved the resolution
plan, submitted by a suitable resolution applicant. Consequently,
the respondent is asserted to have issued a notice to the Interim
Resolution Professional/IRP of the company vide notice, reference
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 4 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:18:49
+0530
No. 87 on 08.04.2022, seeking representation on behalf of the
company and to show cause as to why, sanction for to prosecution
under Section 276B of the IT Act be not accorded against the
company for the commission of the aforenoted TDS default(s), in
accordance with the provisions under Section 200 of the IT Act
read with Rule 30 of the IT Rules. Subsequently, the respondent,
on considering the various replies tendered by the accused, did not
find the same to be satisfactory. Consequently, upon consideration
of all the material on record as well as being cognizant of the legal
principles, including the various circulars issued by the Central
Board of Direct Taxes (hereinafter referred to as ‘CBDT’) from
time to time with respect to the manner/mode and procedure for
launching prosecution, as aforenoted, sanction for filing complaint
against the accused was accorded vide sanction/letter dated
29.04.2022.
2.2. Markedly, upon such complaint being filed by the
respondent before the Ld. Trial Court, as aforenoted, vide order
dated 06.01.2024/impugned order, Ld. Trial Court took
cognizance of the offences, specified under the complaint and
issued summons against the accused, i.e., company and the
revisionist. Pertinent to reproduce the relevant extracts of the order
dated 06.01.2024/impugned order, passed by the Ld. Trial Court,
as under;
“…The present complaint is filed by ITO through
its AR Sh. ***, Deputy Commissioner of Income,
Circle-73(1), Delhi. The AR has filed present
complaint in his capacity as a public servant and in
discharge of his official duty, hence the examination
of complainant u/s 200 Cr.P.C is dispensed with in
terms of Proviso (a) of Section 200 Cr.P.C.
The gravamen of accusation against the accused
persons is that the accused No.1 M/s Abir
Infrastructure Private Limited had deducted TDS of
Rs.5,56,50,048/- during the financial year 2014-15
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 5 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:18:53
+0530
but it did not deposit the same in the government
account within the time stipulated as per the
provisions of The Act and rule 30 of The Income Tax
Rules. The complainant has placed on record show
cause notice(s) issued, order passed under section
2(35) of The Act, the proposal sent to CIT concerned
for grant of sanction, copy of show cause notices
issued by CIT, sanction accorded by CIT to prosecute
the accused persons and TRACES report etc. in
support of its case.
*** *** ***
Since order under section 2(35) of The Act has
already been passed against accused No.2, therefore,
in terms of section 204, accused No.2 became person
responsible for paying the TDS in terms of Section
204 of The Act. This court has jurisdiction to entertain
the present complaint.
From the entire material available on record, this
court is of the considered view that prima facie
offence u/s 276B r/w section 278B/278E of The Act is
made out against both the accused persons. A detailed
summoning order is not being passed in compliance of
the order of the Apex Court in ‘Bhushan Kumar &
Anr. v. State (NCT of Delhi) & Anr‘ (2012) 5 SCC
424. Accordingly, let summons be issued to accused
no. 1 & 2 on filing complete copy of complaint, PF,
RC and Speed Post within a month from today
returnable for 02.03.2024…”
(Emphasis supplied)
3. Ld. Counsel for the revisionist submitted that the
impugned order was passed by the Ld. Trial Court on mere
conjunctures, surmises and in contravention of the settled cannons
of law, deserving to be set aside at the outset, as suffering with
gross illegality. In this regard, Ld. Counsel further submitted that
the impugned order was passed by the Ld. Trial Court on mere
assumptions and that no sound and/or cogent reasons have been
delineated under the said order. It was further submitted that the
Ld. Trial Court, while passing the impugned order did not
appreciate that as per instructions bearing; F. No. 255/339/79-IT
(Inv.), dated 28.05.1980, issued by the CBDT, it has been
mentioned therein that the prosecution under section 276B of IT
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 6 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:18:57 +0530
Act, should not normally be proposed when the amount involved
and/or the period of default is not substantial and the amount in
default has also been deposited in the meantime to the credit of the
Government. As per the Ld. Counsel, in the instant case, it is the
admitted case of the prosecution that the TDS amount, along with
interest, has already been deposited by the accused before the
detection of the default and it is not the case of the respondent that
no timely return was filed by the accused company in respect of
TDS. Ergo, as per the Ld. Counsel, the impugned order as well as
the sanction for prosecution were both passed and granted,
respectively, mechanically without any application of mind and
without considering the said circular, making the impugned order
liable to be set aside on this sole ground. It was further submitted
that the Ld. Trial Court failed to appreciate that present is not a
case of failure of deposit of TDS and therefore no offence under
Section 276B of IT Act is even prima facie made out against the
accused. As per the Ld. Counsel, Section 221 of IT Act specifically
proves for imposition of penalty in case of default of the payment
of tax. However, despite the same, in the instant case, no show
cause notice has been issued by the respondent to the
revisionist/accused for the imposition of penalty, besides no
adjudication proceedings have been initiated for non-deposit or
delayed deposit of TDS, rather, the respondent erroneously
initiated prosecution under Section 276B IT Act to the detriment of
the accused/revisionist.
3.1. Ld. Counsel for the revisionist further submitted that
the Ld. Trial Court failed to consider that in case the revisionist
failed to deposit the TDS amount, as alleged within the stipulated
time period, i.e., by the 7th day of the subsequent month, criminalCR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 7 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:19:00
+0530
prosecution against the revisionist ought/should have been
initiated by the respondent, immediately, which has not been done
in the instant case. On the contrary, as per the Ld. Counsel, in the
present case, the complaint has only been filed in the year, 2023,
around nine years after the alleged default. In this regard, Ld.
Counsel submitted that as per the Standard Operating Procedure
for prosecution in cases of TDS/TCS default(s) ( hereinafter
referred to as the ‘SOP’), dated 07.02.2013, the prosecutable cases
are required to be identified within a period of one month of the
filing of the quarterly TDS statement and thereafter, certain
information/documents regarding the deductor is required to be
collected. Further, as per the Ld. Counsel, same is to be followed
with the issuance of show cause notice to the persons, responsible
for the deduction within 45 (forty five) days of receipt of list of
prosecutable cases. However, in the instant case, the said
guidelines have not been scrupulously followed by the respondent.
On the contrary, it was asserted by the Ld. Counsel that the records
would demonstrate that the show cause notice was issued to the
revisionist only on 06.01.2017, which is way later than the
prescribed time period, making the impugned order liable to be set
aside on this count. Even otherwise, it was submitted by the Ld.
Counsel that the Ld. Trial Court failed to appreciate that the delay
in depositing the TDS was neither intentional nor deliberate,
rather, attributed to the reason of tremendous financial hardships
faced by the revisionist/accused. Correspondingly, as per the Ld.
Counsel, the Ld. Trial Court was oblivious to the fact that as per
the SOP, dated 07.02.2013, time period for launching prosecution
is 30 (thirty) days of receipt of approval under Section 279(1) of IT
Act, which has not been followed in the instant case. In this regard,CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 8 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:19:04
+0530
Ld. Counsel strenuously contended that the sanction order was
passed by the Commissioner of Income Tax (TDS)-1 on
29.04.2022, however, the complaint for launching the prosecution
was filed before the Ld. Trial Court only on 20.12.2023, way
beyond the prescribed time period, entitling the revisionist to the
benefit of such deliberate lapse on the part of the respondent.
3.2. Ld. Counsel for the revisionist further submitted that
the impugned order, passed by the Ld. Trial Court is arbitrary,
misconceived and on the face of it, not in accordance with the
provisions of law. Further, as per the Ld. Counsel, the Ld. Trial
Court failed to appreciate that the complainant, on every step,
delayed the procedure for launching the prosecution and the same
is not maintainable. Further, Ld. Counsel vehemently reiterated
that the Ld. Trial Court erred in not considering that as per the
instruction of CBDT, if the delayed amount of TDS has been
deposited with interest, then initiation of criminal proceedings
would amount to an abuse process of law. Even otherwise, as per
the Ld. Counsel, the Ld. Trial Court failed to appreciate that since
the company was undergoing CIRP before NCLT and moratorium
was underway, no proceedings could have been initiated against
the company by the respondent, as in the instant case. In this
regard, Ld. Counsel further submitted that since the revisionist has
been summoned for vicarious liability, being the Managing
Director of the company, no finding of guilt can be given against
the company in view of the moratorium. As per the Ld. Counsel,
finding of guilt qua the company is a sine qua non for the
prosecution as well as conviction of a person, who is vicariously
liable and in the instant case, as per the Ld. Counsel, in the absence
of the company, no finding can be given against the revisionist,CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 9 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
making the entire proceedings against the revisionist in the instant
case perverse and bad in law. Consequently, it was entreated that
the impugned order be set aside as erroneous and passed in
violation of facts and circumstances of case, law as well as judicial
precedents. In support of the said contentions, reliance was placed
upon the decisions in; National Small Industries Corporation Ltd.
v. Harmeet Singh Paintal & Anr., (2010) 3 SCC 330; Dev
Multicom Pvt. Ltd. & Ors. v. State of Jharkhand & Anr., 2022
SCC Online Jhar. 537; M/s. ABK Consultants Pvt. Ltd., though
A.R., Vipul Kumar Daga & Anr. v. Income Tax Office, through
Income Tax Officer & Anr., Crl. MC No. 1083/2024, dated
09.02.2024 (Hon’ble DHC); Ashok Kumar Aggarwal v. CBI &
Ors., 2016 SCC Online Del. 214; Hemant Mahipatray Shah &
Anr. v. Anand Upadhyay & Anr., Crl. WP No. 3034/2022, etc.,
dated 12.08.2024 (Hon’ble High Court of Bombay); M/s. Fortune
Infovision Pvt. Ltd. & Ors. v. Commissioner of Income Tax &
Anr., WP(C) No. 11431/2018, dated 18.03.2025 (Hon’ble High
Court of Rajasthan); and M/s. AM Enterprises & Anr. v. State of
Jharkhand & Anr., WP(Crl.) No. 577/2022, dated 22.08.2023
(Hon’ble High Court of Jharkhand).
4. Per contra, Ld. SPP for the respondent submitted that
the impugned order was passed by the Ld. Trial Court after due
appreciation of the facts and circumstances of the present case and
judicial precedents, deserving no interference by this Court. It was
further submitted that all the relevant facts and circumstances were
duly considered by the Ld. Trial Court, besides the impugned order
was passed by the Ld. Trial Court, wary of the settled judicial
precedents and the material brought forth. Ld. SPP for the
respondent further submitted that no illegality/infirmity can be
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 10 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:19:12
+0530
attributed to the impugned order, so as to subject the same to any
interference by this Court under this Court’s exercise of its
revisional jurisdiction. Even otherwise, as per Ld. SPP for the
respondent, the instant petition has been preferred by the
revisionist way beyond the statutory prescribed period of
limitation, entitling the same to be rejected on the said ground as
well. Accordingly, Ld. SPP for the respondent prayed that the
instant petition be dismissed as barred, both, on merits as well as
barred by limitation. In support of the said contentions, reliance
was placed upon the decisions in; Madhumilan Syntex Ltd. & Ors.
v. Union of India & Anr., (2007) 11 SCC 297; Indo-Arya Central
Transport Ltd. & Ors. v. CIT (TDS), Delhi-I & Ors.,
MANU/DE/1179/2018; and Golden Gate Properties Ltd. & Ors. v.
The Income Tax Department, MANU/KA/3316/2019.
5. The arguments of Ld. Counsel for the revisionist and
Ld. SPP for the respondent have been heard as well as the records,
including the Ld. Trial Court records and case laws relied upon by
the parties, thoroughly perused.
6. Before proceeding with the determination of the
merits of the present case, this Court deems it apposite to deal with
the objection of Ld. SPP for the respondent, pertaining to delay in
preferring the present revision petition. In this regard, it is
outrightly noted that against the order dated 06.01.2024/impugned
order, passed by the Ld. Trial Court, the present revision petition
was preferred by the revisionist only on 29.05.2024, admittedly
after a period of 143 days from the date of impugned order.
Notably, Article 131 of the Schedule of the Limitation Act, 1963
(hereinafter referred to as the ‘Limitation Act‘), prescribed a
period of 90 (ninety) days in preferring a criminal revision petition
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 11 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:19:18
+0530
from the date of order sought to be revised. Markedly, in the
instant case, the revisionist moved an application, furnishing
information about the limitation of the case along with an affidavit,
relevant extracts of which application are reproduced as under;
“…2. That the complaint title as Income Tax
Office Vs. M/s. Abir Infrastructure Pvt. Ltd. was
listed before the Ld. Trial Court on 02.03.2024 and the
Ld. Trial Court directed the complainant to file fresh
address for service and fresh notices were issued to
the accused persons. Therefore, in or around 10th April
2024, the petitioner/accused came to know of the
present case and he through his counsel put his
appearance through Ld. Trial Court on 27.04.2024
whereon the copies of the complaint were supplied to
him, thereafter, case was adjourned to 01.06.2024.
3. That the petitioner/accused came to know about
the pendency of the present case only on around
10.04.2024 and therefore the revision petition is
within limitation. The copies of the order are annexed
herewith…”
(Emphasis supplied)
7. Quite lucidly, it is seen from above that it is the case
of the revisionist that the notice of the proceedings before the Ld.
Trial Court came to the attention of the revisionist only on
10.04.2024 and soon thereafter, the instant revision petition was
preferred by/on behalf the revisionist, within the statutory period
of limitation. Here, this Court deems it further pertinent to refer to
the order dated 02.03.2024 of the Ld. Trial Court, wherein the Ld.
Trial Court inter alia noted as under;
“…Summons issued to accused has not yet
received back. However, summons issued to accused
in connected file received back with the report that
address is not correct. Complainant is directed to file
fresh and correct address of accused within 20 days
from today for service to accused for the next date i.e.
27.04.2024…”
(Emphasis supplied)
8. Evidently, it is noticed from above that even the
records of the Ld. Trial Court reveal that till 02.03.2024,
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 12 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:19:27
+0530
notice/summons of the proceedings/complaint proceedings
initiated by the respondent against the company and the revisionist
were not received by the revisionist as the summons issued inter
alia qua the revisionist were noted by the Ld. Trial Court to have
not received back served. Correspondingly, as aforenoted, the
revisionist has deposed on an affidavit that the notice of the said
proceedings/complaint case was received by him only on
10.04.2024. Ergo, under such circumstances, this Court finds
itself, in concurrence with the submission of the Ld. Counsel for
the revisionist that computing the period of limitation in preferring
the instant revision petition from 10.04.2024, when the
notice/summons of the complaint proceedings are asserted to have,
first received by the revisionist, the instant revision petition having
been filed before this Court on 30.05.2024, is within the statutory
prescribed period of limitation. Needless to mention that this Court
is conscious of the settled law, repeatedly affirmed by superior
court that where a person/petitioner had no notice or knowledge of
an order passed by a court, the period of limitation for filing of the
revision against such an order would be computed/taken from the
date of knowledge of such an order by the said person/petitioner.
Reference, in this regard is made to the decision of the Hon’ble
High Court of Delhi in Rajesh Garg v. Tata Tea Ltd. & Anr., Crl.
Rev. Pet. No. 688/2003, dated 18.02.2011, wherein the Hon’ble
Court in an akin context, noted as under;
“16. Having heard learned counsels and
considered the impugned order, as also the order
passed by the learned ACMM in the light of the
numerous precedents cited by the learned counsels, I
am of the view that there is no merit in this petition
and the same is liable to be dismissed. So far as the
plea that the revision of the respondent was barred by
limitation is concerned, the petitioner has not placed
any material on record to suggest that the respondentCR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 13 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:19:31
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had notice or knowledge of the order passed by the
learned ACMM. The respondent was not put to notice,
or heard before passing of the order dated 22.12.2000.
Even after its passing, the same was not
communicated to the respondent. The period of
limitation of filing of the revision petition would
begin to run only from the date of knowledge of the
order against which the said revision was preferred.
As the respondent learnt of the order dated 22.12.2000
passed by the learned ACMM only on 19.03.2001, or
20.03.2001, the revision petition, which was preferred
on 22/23.03.2001 cannot be said to be barred by
limitation…”
(Emphasis supplied)
9. Proceeding further, in order to appreciate the scope
and purview of analysis of the petitioner’s entreaty in the present
petition, it would be apposite at this stage to make a reference to
the relevant provisions under law, in particular that under Section
397 Cr.P.C.1, as under;
“397. Calling for records to exercise of powers of
revision – (1) The High Court or any Sessions Judge
may call for and examine the record of any proceeding
before any inferior Criminal Court situate within its or
his local jurisdiction for the purpose of satisfying
itself or himself as to the correctness, legality or
propriety of any finding, sentence or order, recorded
or passed, and as to the regularity of any proceedings
of such inferior Court, and may, when calling for such
record, direct that the execution of any sentence or
order be suspended, and if the accused is in
confinement, that he be released on bail or on his own
bond pending the examination of the record.
Explanation – All Magistrates, whether Executive
or Judicial, and whether exercising original or
appellate jurisdiction, shall be deemed to be inferior to
the Sessions Judge for the purposes of this sub-section
and of Section 398.
1
Pari materia to Section 438 BNSS, which provides; “438. Calling for records to exercise powers of revision-(1) The
High Court or any Sessions Judge may call for and examine the record of any proceeding before any inferior
Criminal Court situate within its or his local jurisdiction for the purpose of satisfying itself or himself as to the
correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any
proceedings of such inferior Court, and may, when calling, for such record, direct that the execution of any sentence
or order be suspended, and if the accused is in confinement that he be released on his own bond or bail bond pending
the examination of the record.***Explanation–All Magistrates, whether Executive or Judicial, and whether
exercising original or appellate jurisdiction, shall be deemed to be inferior to the Sessions Judge for the purposes of
this sub-section and of Section 439.***(2) The powers of revision conferred by sub-section (1) shall not be exercised
in relation to any interlocutory order passed in any appeal, inquiry, trial or other proceeding….” (Emphasis supplied).
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 14 of 34 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.06.30 15:19:36 +0530
(2) The powers of revision conferred by sub-
section (1) shall not be exercised in relation to any
interlocutory order passed in any appeal, inquiry, trial
or other proceeding…”
(Emphasis supplied)
10. Pertinently, from a perusal of the aforesaid, it is quite
evident that the revisional jurisdiction of this Court can be agitated
either suo motu or an application of parties, solely in the cases
where there is a palpable error, non-compliance of the provision of
law, decision of Trial Court being completely erroneous or where
the judicial decision is exercised arbitrarily. In this regard, reliance
is placed upon the decision of the Hon’ble Supreme Court in Amit
Kumar v. Ramesh Chander, (2012) 9 SCC 460 , wherein the
Hon’ble Court while explicating the various contours of the
provision under Section 397 Cr.P.C. observed as under:
“12. Section 397 of the Code vests the court with
the power to call for and examine the records of an
inferior court for the purposes of satisfying itself as to
the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error and it may not be
appropriate for the court to scrutinise the orders,
which upon the face of it bears a token of careful
consideration and appear to be in accordance with
law. If one looks into the various judgments of this
Court, it emerges that the revisional jurisdiction can
be invoked where the decisions under challenge are
grossly erroneous, there is no compliance with the
provisions of law, the finding recorded is based on no
evidence, material evidence is ignored or judicial
discretion is exercised arbitrarily or perversely. These
are not exhaustive classes, but are merely indicative.
Each case would have to be determined on its own
merits.
13. Another well-accepted norm is that the
revisional jurisdiction of the higher court is a very
limited one and cannot be exercised in a routine
manner. One of the inbuilt restrictions is that it should
not be against an interim or interlocutory order. The
Court has to keep in mind that the exercise of
revisional jurisdiction itself should not lead toCR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 15 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:19:39
+0530
injustice ex facie. Where the Court is dealing with the
question as to whether the charge has been framed
properly and in accordance with law in a given case, it
may be reluctant to interfere in exercise of its
revisional jurisdiction unless the case substantially
falls within the categories aforestated. Even framing
of charge is a much advanced stage in the proceedings
under the CrPC.”
(Emphasis supplied)
11. Similarly, the Hon’ble High Court of Delhi in V.K.
Verma v. CBI, 2022 SCC OnLine Del 1192, in a similar context
noted as under;
“67. The revisional jurisdiction is not meant to test
the waters of what might happen in the trial. The
Revisional Court has to consider the correctness,
legality or propriety of any finding inter se an order
and as to the regularity of the proceedings of the court
below. While doing so, the Revisional Court does not
dwell at length upon the facts and evidence of the
case, rather it considers the material only to satisfy
itself about the legality and propriety of the findings,
sentence and order and refrains from substituting its
own conclusion on an elaborate consideration of
evidence. In the instant case, the Petitioner has failed
to make out a case for exercise of the revisional
jurisdiction since there is no patent error in the
impugned order on the face of record.”
(Emphasis supplied)
12. Quite evidently, it may be noted from above that the
revisional jurisdiction of the higher court is quite limited and
cannot be exercised in a routine manner. In fact, as aforenoted, the
revisional Court can interfere only in the instances where an order
of trial court was passed, unjustly and unfairly. Further, it is a
settled law2 that trite law that in a case where the order of
subordinate Court does not suffer from any illegality, “merely
because of equitable considerations, the revisional Court has no
jurisdiction to re-consider the matter and pass a different order in a
routine manner.” Reference in this regard is made to the decision
2
Juned v. State of M.P., 2023 SCC OnLine MP 4458; and Dilip Damor v. State of M.P., 2024 SCC OnLine MP 958.
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 16 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:19:43
+0530
in Taron Mohan v. State, 2021 SCC OnLine Del 312, wherein the
Hon’ble High Court of Delhi expounded as under;
“9. The scope of interference in a revision petition
is extremely narrow. It is well settled that Section 397
CrPC gives the High Courts or the Sessions Courts
jurisdiction to consider the correctness, legality or
propriety of any finding inter se an order and as to the
regularity of the proceedings of any inferior court. It is
also well settled that while considering the legality,
propriety or correctness of a finding or a conclusion,
normally the revising court does not dwell at length
upon the facts and evidence of the case. A court in
revision considers the material only to satisfy itself
about the legality and propriety of the findings,
sentence and order and refrains from substituting its
own conclusion on an elaborate consideration of
evidence.”
(Emphasis supplied)
13. Notably in the context of the foregoing, it is further
apposite to observe here that it is no longer res integra3 that the
order of issuance of summons against an accused is not an
interlocutory order within the meaning of Section 397 of the Code
and revision petition against such an order is maintainable.
Reference in this regard is made to the decision of the Hon’ble
Apex Court in Rajendra Kumar Sitaram Pande & Ors. v. Uttam &
Anr., AIR 1999 SC 1028: 1999 (3) SCC 134, wherein the Hon’ble
Court enunciated the law in regard the foregoing as under;
“Discretion in the exercise of revisional
jurisdiction should, therefore, be exercised within the
four corners of Section 397, whenever there has been
miscarriage of justice in whatever manner. Under sub-
section (2) of Section 397, there is a prohibition to
exercise revisional jurisdiction against any
interlocutory order so that inquiry or trial may proceed
without any delay. But the expression “interlocutory
order” has not been defined in the Code. In Amar Nath
& Ors. vs. State of Haryana 1978(1) SCR 222, this
Court has held that the expression “interlocutory
order” in Section 397(2) has been used in a restricted
sense and not in a broad or artistic sense and merely3
Dhariwal Tobaco Products Ltd. & Ors. v. State of Maharashtra & Anr., AIR 2009 SC 103.
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 17 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:19:47
+0530
denotes orders of purely interim or temporary nature
which do not decide or touch the important rights or
liabilities of the parties and any order which
substantially affects the right of the parties cannot be
said to be an “interlocutory order”. In Madhu Limaye
vs. State of Maharashtra 1978(1) SCR 749, a three
Judge Bench of this Court has held an order rejecting
the plea of the accused on a point which when
accepted will conclude the particular proceeding,
cannot be held to be an interlocutory order. In V.C.
Shukla vs. State 1980(2) SCR 380, this Court has held
that the term “interlocutory order” used in the Code of
Criminal Procedure has to be given a very liberal
construction in favour of the accused in order to
ensure complete fairness of the trial and the revisional
power of the High Court or the Sessions Judge could
be attracted if the order was not purely interlocutory
but intermediate or quasi final. This being the position
of law, it would not be appropriate to hold that an
order directing issuance of process is purely
interlocutory and, therefore, the bar under sub- section
(2) of Section 397 would apply. On the other hand, it
must be held to be intermediate or quasi final and,
therefore, the revisional jurisdiction under Section
397 could be exercised against the same. The High
Court, therefore, was not justified in coming to the
conclusion that the Sessions Judge had no jurisdiction
to interfere with the order in view of the bar under sub-
section (2) of Section 397 of the Code…”
(Emphasis supplied)
14. Ergo, in the background of the foregoing, however,
before proceeding further with the evaluation of the rival
contentions of the parties, this Court deems it pertinent here to
reproduce the relevant provisions under law/IT Act, germane for
the present discourse, as under;
“2. In this Act, unless the context otherwise
requires,-***(31) “person’ includes-
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of
individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling
within any of the preceding sub-clauses.
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 18 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:19:51
+0530
Explanation- For the purposes of this clause, an
association of persons or a body of individuals or a
local authority or an artificial juridical person shall be
deemed to be a person, whether or not such person or
body or authority or juridical person was formed or
established or incorporated with the object of deriving
income, profits or gains;
*** *** ***
(35) “principal officer’, used with reference to a
local authority or a company or any other public body
or any association of persons or any body of
individuals, means- (a) the secretary, treasurer,
manager or agent of the authority, company,
association or body, or
(b) any person connected with the management or
administration of the local authority, company,
association or body upon whom the Assessing Officer
has served a notice of his intention of treating him as
the principal officer thereof;
*** *** ***
200. Duty of person deducting tax.-(1) Any person
deducting any sum in accordance with the foregoing
provisions of this Chapter shall pay within the
prescribed time, the sum so deducted to the credit of
the Central Government or as the Board directs.***
*** *** ***
201. Consequences of failure to deduct or pay- (1)
Where any person, including the principal officer of a
company,-
(a) who is required to deduct any sum in
accordance with the provisions of this Act; or
(b) referred to in sub-section (1A) of section 192,
being an employer,
does not deduct, or does not pay, or after so
deducting fails to pay, the whole or any part of the tax,
as required by or under this Act, then, such person,
shall, without prejudice to any other consequences
which he may incur, be deemed to be an assessee in
default in respect of such tax:
*** *** ***
(1A) Without prejudice to the provisions of sub-
section (1), if any such person, principal officer or
company as is referred to in that sub-section does not
deduct the whole or any part of the tax or after
deducting fails to pay the tax as required by or under
this Act, he or it shall be liable to pay simple interest,-
(i) at one per cent for every month or part of a
month on the amount of such tax from the date on
which such tax was deductible to the date on which
such tax is deducted; and
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 19 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:19:55
+0530
(ii) at one and one-half per cent for every month or
part of a month 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:***
*** *** ***
276B. Failure to pay tax to the credit of Central
Government under Chapter XII-D or XVII-B- If a
person fails to,-
(a) pay to the credit of the Central Government, the
tax deducted at source by him as required by or under
the provisions of Chapter XVII-B; or
(b) pay tax or ensure payment of tax to the credit of
the Central Government, as required by or under-
(i) sub-section (2) of section 115-O;
(ii) the proviso to section 194B;
(iii) the first proviso to sub-section (1) of section
194R;
(iv) the proviso to sub-section (1) of section 194S;
or
(v) sub-section (2) of section 194BA,
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:
Provided that the provisions of this section shall
not apply if the payment referred to in clause (a) has
been made to the credit of the Central Government at
any time on or before the time prescribed for filing the
statement for such payment under sub-section (3) of
section 200.
*** *** ***
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.
*** *** ***
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:
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 20 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:19:58
+0530
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.
*** *** ***
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; and
(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)
15. Pertinently, it is seen from a conjoint reading of the
aforesaid provisions, in particular that of Section 200(1) of IT Act,
that the said Section provides that any person, deducting any sum
in accordance with the provisions under Chapter XVIIB of IT Act,
is obliged to pay, “within the prescribed time, the sum so deducted
to the credit of the Central Government or as the Board directs…”.
Remarkably, Section 201(1) of IT Act inter alia deals with the
consequences of failure to deduct or pay the tax, as per the
provisions of the said enactment. In particular, Section 201(1) of
IT Act inter alia provides that where any person, including the
principal officer of a company, “does not deduct, or does not pay,
or after so deducting fails to pay, the whole or any part of the tax,
as required by or under this Act…”, shall be deemed to be an
assessee in default in respect of such tax. Here, it is further
pertinent to refer to the provisions under Section 2(35) of IT Act,
which defines the term, ‘principal officer’, in respect of company
as, “any person connected with the management or administration
of the local authority, company, association or body upon whom
the Assessing Officer has served a notice of his intention of
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 21 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:02
+0530
treating him as the principal officer thereof…”.
16. Clearly, it is seen from above that Section 201(1) of
IT Act defines any person, including the principal officer of
company as an assessee in default, where such person/principal
officer of company inter alia fails to pay the tax, as required under
Chapter XVIIB of IT Act, after its deduction. Notably, under such
circumstances, law provides that besides charging interest under
Section 201(1A) of the IT Act on delayed payment, the person
deemed to be assessee in default shall also be liable to be
prosecuted for the offence under Section 276B of IT Act. Here, it is
further pertinent to refer the provisions under Section 278B of the
said enactment, which deals with a situation of commission of
offences by company. In particular, as per the said provision, when
an offence under the said enactment/IT Act is committed by a
company, every person who, at the time of commission of such
offence, “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…”.
Clearly, Section 278B of IT Act encompasses vicarious criminal
liability of every such person, who was in charge and respondent
for the company for the conduct of its business as well as the
company for such offence. However, here it is further pertinent to
refer the provisions under Section 278AA of the IT Act, which
provides that no liability inter alia under the provisions under
Section 276B of the said enactment can be attracted where such
person proves that there was a reasonable cause for failure,
encompassed under the said provision.
17. Consequently, with the foregoing understanding, this
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 22 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
Date:
GOYAL 2025.06.30
15:20:06
+0530
Court would proceed with the evaluation of the merits of the
present case as well as the rival contentions of the revisionist and
the respondent. In this regard, this Court deems it pertinent to
outrightly refer to the letter/Show Cause Notice bearing F.No.
ACIT/C 73(1)/Show Cause/2016-17/1334, dated 06.01.2017,
issued by/on behalf of the respondent to the revisionist inter alia to
the following effect;
“…Subject: Show Cause u/s 2(35) of the I. T. Act,
1961 for the F.Y. 2013-14 to 2014-15 & 2015-16-reg.-
On perusal of records, it is found that during the
F.Y. 2013-14 to 2014-15 & 2015-16, M/s Abir
Infrastructure Private Limited, has deducted tax
against various payment but the same were deposited
into Govt. account after the prescribed dates as per
Rule 30 of 1.T. Rules. The details of the default
against which prosecution proceedings u/s 276B (a) of
the Act proposed to be initiated are as follows:
S. No. Financial Amount of Tax Late
Year deposited after payment
due date interest
1. 2013-14 5,79,77,489/- 43,39,325/-
2. 2014-15 5,56,50,048/- 61,76,423/-
3. 2015-16 3,69,78,038/- 24,08,403/-
(Emphasis supplied)
Therefore, a default has been committed by the
deductor company in depositing the TDS payment
into Govt. Account after the prescribed dates in which
you were the responsible person on behalf of the
company during the period.
*** *** ***
3. Since you have been actively participating in
functioning & management of company affairs, you
are hereby required to show cause as to why you
should not be treated as Principal Officer within the
meaning of provisions of sub-section 35 of section 2
of the I. T. Act, 1961 which is as under:-
*** *** ***
During the period 01/04/2013 to 31/03/2014 &
01/04/2014 to 31/03/2015 & 01/04/2015 to
31/03/2016, since the company has committed the
default in depositing the TDS into Govt. account after
prescribed time limit from the date of deduction of
such tax, you are required to show cause as to why you
should not be treated as a Principal Officer within the
meaning of Section 2(35) of the Act and also show
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 23 of 34Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:09
+0530
cause as to why prosecution u/s 276B of the Act, 1961
should not be launched against you as you were the
responsible person for these periods. You are hereby
given an opportunity of being heard to explain your
contention by attending the office of undersigned or
sent a written reply stating the name of the “principal
officer) on or before 17.01.2016 failing which it will
be presumed that you have nothing to say in this
regard and necessary action for launching the
prosecution u/s 2768 of the I. T. Act, 1961 will be
taken against you…”
(Emphasis supplied)
18. Notably, the aforesaid Show Cause Notice was
responded by the company vide reply dated 23.01.2017 inter alia
proclaiming, “…The company’s day to day operations are
managed by the Principal Officer and Managing Director of the
company, Mr. Ramesh Surapaneni…”. Consequently, being wary
of the aforesaid reply to the Show Cause Notice, as well as
considering the factual situation involved, order dated 06.03.2017,
was passed by Assistant Commissioner, Income Tax, in terms of
the provisions under Section 2(35) of the IT Act, holding the
revisionist as the principal officer of the company for the
purpose(s) of Section 276B of the IT Act. Apposite to reproduce
the relevant extracts from the said order, as under;
“…As per the provisions of sub-section (1) of
Section 201 of the I.T. Act, where any person.
including the principal officer of a company who is
required to deduct any sum in accordance with the
provisions of this Act, does not deduct, or does not
pay, or after so deducting fails to pay the whole or any
part of the tax, as required by or under this Act, then,
such person, shall without prejudice to any other
consequences which he may incur, be deemed to be an
assessee in default in respect of such tax. Again, as per
the provisions of Section 276B of the IT Act, 1961, if
a person fails to pay to the credit of the Central
Government the tax deducted at source by him as
required by or under the provisions of Chapter XVII-
B, 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.
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 24 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:12
+0530
*** *** ***
Accordingly, as per provisions of section 2(35) of
the IT Act 1961, he/she was asked to show cause as to
why he/she should not be treated as a Principal Officer
vide notice u/s. 2(35) of the IT Act dated 06.01.2017.
The said notice was issued and served upon him in
context of initiation of prosecution proceedings u/s.
276B of the 1.T. Act, 1961 since he/she was
connected with management or administration of the
deductor-assessee (company) at the time of
committing such offence.
In response to the above said show cause, reply
was filed dated 23.01.2017 and submitted that Mr.
Ramesh Suprapaneni, was Managing Director during
F.Y. 2013-14, 2014-15 and 2015-16. hence, he may
be treated as “principal officer”, for the purpose of 276
B.
In view of the foregoing, he/she is held to be the
“Principal Officer” within the meaning of sub-section
35 of section 2 of the Act being connected with
management or administration of the deductor
assessee (company) for the purpose of initiation of the
proceedings as per the provisions of Section 276B of
the IT Act, 1961 against the assessee deductor…”
(Emphasis supplied)
19. Unmistakably, it is seen from above that in light of the
admission of the company, the revisionist was deemed to be the
principal officer of the company in terms of the provisions under
Section 2(35) of the IT Act, resulting in the issuance of order dated
06.03.2017 by/on behalf of the respondent to the said effect.
Significantly, as aforenoted, the respondent, subsequently, issued
several notices to the revisionist as well as the company, seeking
explanation as to why action under Section 276B/278B of the IT
Act be not initiated against the company and the
revisionist/accused. However, as aforenoted, since the explanation
tendered by the accused was determined to be unsatisfactory,
sanction for prosecution under Section 279(1) of the IT Act was
duly accorded vide letter dated 22.04.2022, against the accused,
leading to the initiation of the instant complaint proceedings
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 25 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:16
+0530
before the Ld. Trial Court, followed by the passing of impugned
order of cognizance and summoning of the accused. Strikingly, as
aforenoted, one of the primary bone of contention of the Ld.
Counsel for the revisionist, challenging the order of
cognizance/summoning of the revisionist is that since the TDS
amount, along with interest, has already been deposited by the
accused before the detection of the default by the respondent, no
prosecution ought to be initiated inter alia against the revisionist in
the instant case. In this regard, Ld. Counsel for the revisionist has
stalwartly relied on the instructions bearing; F. No. 255/339/79-IT
(Inv.), dated 28.05.1980 as well as the decision of the Hon’ble
High Court of Jharkhand in Dev Multicom Pvt. Ltd. & Ors. v.
State of Jharkhand & Anr., (Supra.), wherein the Hon’ble Court
inter alia, remarked as under;
“17. It is an admitted fact that the TDS amount in
all these cases were deposited with interest and the
chart with respect to the same is also annexed with the
counter affidavit of the Income Tax Department,
wherein the date of deduction and date of depositing
the said amount has been mentioned. However, some
delay occurred in depositing the TDS. Apart from one
or two cases, the deducted amount are not more than
50,000/-. While passing the sanction under Section
279(1) of the Act, the sanctioning authority has not
considered the CBDT instructions, bearing F. No.
255/339/79-IT (Inv.) dated 28.05.1980, issued in this
regard by the CBDT. The CBDT guidelines was
considered by the Patna High Court in the case of
Sonali Autos (P) Ltd. (Supra) and after considering
this guidelines, the Court has interfered with the
matter and quashed the entire criminal proceedings. In
CBDT instructions, it is mentioned that prosecution
under Section 276(B) of the Act shall not normally be
proposed when the amount involved and / or the
period of default is not substantial and the amount in
default has also been deposited in the meantime to the
credit of Government. No such consideration will, of
course, apply to levy of interest under Section
201(1A) of the Act. This is quoted in the case of
Sonali Autos (P) Ltd. (Supra). Moreover after
receiving the deducted amount with interest, the
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 26 of 34Digitally
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ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:20
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prosecution has been launched against the petitioners,
which is not in accordance with law. If the petitioners
failed to deposit the amount in question within the
stipulated time, i.e. by the 7th day of the subsequent
month, it was required to launch the prosecution
immediately, which has not been done in the cases in
hand. Moreover Section 278(AA) of the Act clearly
states that no person for any failure referred to under
Section 276(B)of the Act shall be punished under the
said provisions, if he proves that there was reasonable
cause for such failure. The judgment relied by Ms
Amrita Sinha, the CBDT guidelines were not
considered. On this ground these cases are
distinguishable in view of the facts and circumstances
of the cases relied upon by Ms. Amrita Sinha…”
(Emphasis supplied)
20. Undoubtedly, in the aforenoted dictate, the Hon’ble
High Court rebuked the continuation of proceedings under Section
276B of the IT Act, one the amount involved was eventually
deposited with the authorities, albeit with delay. However, in the
considered opinion of this Court, the facts of the present case
would not be covered under the said dictates, as being clearly
distinguishable. Needless in this regard to mention that in the said
dictate, the Hon’ble High Court specifically noted that the amount
deducted in most of the cases was not more than Rs. 50,000/-
(Rupees Fifty Thousand only), which was deposited with interest
by assessee in the said case. Correspondingly, instructions
bearing; F. No. 255/339/79-IT (Inv.), dated 28.05.1980 envisages
a situation, wherein inter alia the amount involved and/or the
period of default is not substantial. However, in the instant case,
the amount involved is quite significant, besides as hereinunder
observed, the default on the part of the accused in the present case
is avowed to be repetitive. Clearly, under such circumstances, the
violation committed by the revisionist and company/accused,
cannot be termed to be diminutive. Even otherwise, from a
scrupulous analysis of the sanction order dated
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 27 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:25
+0530
22.04.2022/sanction granted for prosecution, it is apparent that all
the applicable guidelines, principles, rules, etc., were duly noted
by the sanctioning authorities. Concomitantly, in the considered
opinion of this Court, no violation of any guidelines or circulars of
CBDT appear to be forthcoming from the material placed on
record. Needless to further mention that in the considered opinion
of this Court, the facts and circumstances brought forth are
squarely covered under and governed by the decision of Hon’ble
Apex Court in Madhumilan Syntex Ltd. & Ors. v. Union of India
& Anr., (Supra.), wherein the Hon’ble Court, whilst confronted
with an akin situation, noted as under;
“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 Judge of the
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 relating to
prosecution nugatory.
*** *** ***
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
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 28 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:30 +0530
(Dead) Through LRs & Anr., JT (2007) 4 SC 159 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;***”
(Emphasis supplied)
21. Manifestly, the Hon’ble Supreme Court in the
aforesaid dictate outrightly dismissed the argument, as one raised
even before this Court, that since there is there is no provision
under the IT Act, imposing criminal liability for delay in deduction
or for non-payment in time, no liability under Section 276B IT Act
can be attributed to a person/accused, one the amount has been
deposited, though, with delay. In fact, as aforenoted, the Hon’ble
Court in this regard, noted with lucidness that once a period of
payment of tax as well as liability is ascertained under a statute,
such payment must be made within the said period. As a corollary,
in case payment of tax is not made within that period, there is
default, and an appropriate action can be taken under law.
22. In so far as the contention of the Ld. Counsel for the
revisionist, pertaining to the initiation of CIRP against the
company in terms of the provisions under the Insolvency and
Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC’), is
concerned, this Court is conscious of the settled law 4 that stay of
civil proceedings in terms of the provisions under IBC, pursuant to
moratorium issued under Section 145 thereof, does not affect4
Saranga Anil Kumar Aggarwal v. Bhavesh Dhirajlal Seth & Ors., Civil Appeal No(s). 4048/2024, dated
04.03.2025.
5
14. Moratorium- “(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the
Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: – (a) the
institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution
of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;*** (b)
transferring, encumbering, alienating or disposing off by the corporate debtor any of its assets or any legal right or
beneficial interest therein;*** (c) any action to foreclose, recover or enforce any security interest created by the
corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);*** (d) the recovery of any property
by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.***
Explanation.-For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in
any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar
grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other
authority constituted under any other law for the time being in force, shall not be suspended or terminated on the
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 29 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:34
+0530
criminal proceedings. Even otherwise, the Hon’ble Supreme Court
in P. Mohanraj v. M/s. Shah Brothers Ispat Pvt. Ltd., AIR 2021 SC
1308, whilst being confronted with an akin situation of
continuation of proceedings under Section 138 of the Negotiable
Instruments Act, 1881 against the company and its
Directors/persons responsible, under Section 141 of the said
enactment, unambiguously noted that the moratorium provision
contained in Section 14 IBC would apply only to the corporate
debtor (company) and the natural, specified under Section 141 of
the NI Act, continue to be statutorily liable. Apposite to reproduce
the relevant extracts of the decision of the Hon’ble Apex Court in
P. Mohanraj v. M/s. Shah Brothers Ispat Pvt. Ltd., (Supra.) , as
under;
“102. Since the corporate debtor would be covered
by the moratorium provision contained in Section 14
of the IBC, by which continuation of Section 138/141
proceedings against the corporate debtor and initiation
of Section 138/141 proceedings against the said
debtor during the corporate insolvency resolution
process are interdicted, what is stated in paragraphs 51
and 59 in Aneeta Hada (supra) would then become
applicable. The legal impediment contained in
Section 14 of the IBC would make it impossible for
such proceeding to continue or be instituted against
the corporate debtor. Thus, for the period of
moratorium, since no Section 138/141 proceeding can
continue or be initiated against the corporate debtor
because of a statutory bar, such proceedings can be
initiated or continued against the persons mentioned
in Section 141(1) and (2) of the Negotiable
Instruments Act. This being the case, it is clear that the
moratorium provision contained in Section 14 of the
IBC would apply only to the corporate debtor, the
natural persons mentioned in Section 141 continuing
to be statutorily liable under Chapter XVII of the
Negotiable Instruments Act.”
(Emphasis supplied)
grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use
or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the
moratorium period;***” (Emphasis supplied)
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 30 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:38
+0530
23. In as much as the contention of the Ld. Counsel for
the revisionist pertaining to alleged delay in initiation of the
criminal proceedings against the revisionist is concerned, this
Court deems it apposite to observe that by virtue of explicit
provisions under Section 2 of the Economic Offences
(Inapplicability of Limitation) Act, 1974 read with the Schedule of
the said enactment, applicability of Cr.P.C. is excluded to the
provisions under IT Act. Even otherwise, since the offence under
Section 276B IT Act provides for punishment/sanction of rigorous
imprisonment for a term which shall not be less than 03 (three)
months, but which may extend to a period of 07 (seven) years and
with fine, the provisions under Section 468 Cr.P.C. would not even
otherwise, be applicable to the instant case. Ergo, under such
circumstances, this Court is not convinced that the timeline for
prosecution of 30 (thirty) days of receiving approval under Section
279(1) of IT Act, as specified under Clause 4 of the Standard
Operating Procedure for prosecution in cases of TDS/TCS
default(s), dated 07.02.2013, must be strictly construed. Needless
to mention that where no embargo is provided under law for
prosecution of such offence, same cannot be read in by seeking
recourse to the provisions under the SOP. On the contrary, this
Court is of the considered opinion that the said schedule/time limit
can, at best be considered directory for concerned authorities to
enable expeditious initiation/disposal of prosecution and not to be
read as a bar so as to give undue advantage to an erring party to
claim advantage thereof. Even otherwise, as per the Standard
Operating Procedure for prosecution in cases of TDS/TCS default
bearing; F. No. 285/51/2013-IT(Inv. V)471, dated 09.12.2016, the
timeline for initiation of such prosecution has been specified to be ,CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 31 of 34
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:43
+0530
‘preferably’ within a period of 30 (thirty) days of receipt of
approval under Section 279(1) of the IT Act. Even otherwise,
Clause 5.2 of the revised SOP has clarified that the timelines
envisaged therein, “…should be followed as far as possible.
However, any deviation from the timelines shall not render
prosecution proceedings barred by limitation…”.
24. Apropos the present discourse, this Court deems it
further pertinent to note that in so far as the defence of the Ld.
Counsel for the revisionist pertaining to delayed deposit of TDS is
concerned, or there being a reasonable cause for non-compliance
of provisions under Section 276B of IT Act, same, in the
considered opinion of this Court, a subject matter of trial, which
cannot be delved into detail at this stage. Apposite in this regard to
note that in similar context, the Hon’ble High Court of Delhi in
Indo-Arya Central Transport Ltd. & Ors. v. CIT (TDS), Delhi-I &
Ors., (Supra.), remarked as under;
“8. Petitioners, do not dispute default and delay in
deposit of TDS of more than Rs.3.53 crore relating to
the four quarters between 30th June, 2012 to 31st
March, 2013. TDS was belatedly deposited between
30th June, 2013 to 16th September, 2013. The issues
raised by the petitioners are ex-facie factual and could
constitute defense of the petitioners, as constituting
reasonable cause. Onus to prove reasonable cause
under Section 278AA of the Act is on the person being
prosecuted.
9. Similarly, with regard to the Standard Operating
Procedure, the contention that default had continued
for less than twelve months and effect thereof are
aspects which would be considered and decided in the
course of criminal proceedings. Late deposit of TDS
in gigantic proportions after the end of the financial
year, as per the respondents, has huge ramifications
and consequences not limited to non-payment of tax,
but adverse consequences and sufferance of hundreds
of deductee who did not get credit of the tax deducted
and had to pay tax and interest. Subsequently, they
would have filed revised returns for refund causing
harassment and inconvenience. We would accept that
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 32 of 34
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by ABHISHEK
GOYAL
ABHISHEK
Date:
GOYAL 2025.06.30
15:20:47
+0530
grant of sanction could become subject matter of
judicial review, albeit in a limited manner to ensure
that the authority has acted fairly and reasonably and
we do not act as an appellate forum that can substitute
the opinion. Necessity of sanction is to filter out
frivolous, malafide and vindictive prosecution. It is
given on prima facie reaching the result that relevant
facts constitute an offence. Technicalities and hyper-
technical approach should not be adopted when the
sanction order indicates and reflects application of
mind.”
(Emphasis supplied)
25. Therefore, in light of the foregoing discussion, this
Court unswervingly records that the Ld. Trial Court did not
commit any irregularity, illegality and/or impropriety under the
impugned order, while taking cognizance of the offences specified
under the respondent’s complaint and inter alia directing issuance
of summons to the revisionist herein, in light of the facts and
circumstances, arguments addressed, documents and the material
placed on record, as well as judicial dictates. Accordingly, in the
considered opinion of this Court the present revision petition
deserves to be dismissed as devoid of merits and is hereby
dismissed. Apposite at this stage to note that, though, this Court
holds highest regard for the decisions relied upon by Ld. Counsel
for the revisionist, however, the same would not, in the considered
opinion of this Court, come to the aid/rescue of the revisionist in
the manner as prayed for, as the facts and circumstances of the said
cases/dictates are clearly, distinguishable.
26. Consequently, while dismissing the present revision
petition, this Court upholds the order dated 06.01.2024/impugned
order, passed by Ld. ACMM (Special Act), Central, Tis Hazari
Courts, Delhi in case bearing; ‘ Income Tax Office v. M/s. Abir
Infrastructure Pvt. Ltd., Ct. Case No. 2918/2023′, emanating in a
complaint proceedings, initiated in terms of the provisions under
CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 33 of 34
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:50 +0530
Section 200 Cr.P.C. for the offences under Section 276B read with
Section 278B/278E and Section 279 of IT Act, taking cognizance
of the said offence(s) and directing issuance of summons inter alia
against the revisionist. Needless to mention that with the dismissal
of the present petition, the order of stay, if any, stands vacated.
27. Trial Court Record along with a copy of this
order/judgment be sent to the Ld. Trial Court concerned with
directions to proceed as per law.
28. Revision file be consigned to record room after due
compliance Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.30
15:20:56
+0530Announced in the open Court (Abhishek Goyal)
on 30.06.2025. ASJ-03, Central District,
Tis Hazari Courts, DelhiCR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 34 of 34