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, criminal CR 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 respondent CR 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 +0530 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 to CR 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 merely 3 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 34 Digitally 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 34 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.30 15:20:20 +0530 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 affect 4 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 Digitally signed 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 +0530 Announced in the open Court (Abhishek Goyal) on 30.06.2025. ASJ-03, Central District, Tis Hazari Courts, Delhi CR No. 206/2024 Ramesh Surapaneni v. Income Tax Office. Page 34 of 34