Delhi District Court
M/S Viraj Exports Pvt. Ltd vs Income Tax Office (Ito) on 12 March, 2018
1
IN THE COURT OF SH.NARINDER KUMAR
SPECIAL JUDGE2:NDPS ACT
(CENTRAL DISTRICT):TIS HAZARI COURT:DELHI
Decided on: 12.03.2018
CA No. : 103/18 of 28.02.2018
M/s Viraj Exports Pvt. Ltd.,
7/8, Roop Nagar,
Delhi 110007
Also at:
E106, Nehru Vihar,
Delhi .....Appellant
Versus
Income Tax Office (ITO)
Through
Sh. Narinder Juyal,
ITO Ward - 78 (3),
Income Tax Department,
Laxmi Nagar, District Centre,
Delhi110092 .....Respondent
JUDGMENT
Appellant herein has been facing trial before learned Additional Chief Metropolitan Magistrate for an offence under Section 276B read with Section 278B of Income Tax Act (hereinafter referred to as "the Act") on the accusation 2 that after deduction of Tax Deducted at Source for the financial year 20112012, the said amount of Rs.5,06,998/ was not deposited in the account of Government within the prescribed period. Company M/s Viraj Exports Pvt. Ltd. was also held guilty for the offence under Section 276 B read with Section 278B of the Act vide judgment dated 10.01.2018.
2. On the point of sentence, vide order dated 30.01.2018, Trial Court sentenced the company to pay fine of Rs.4,00,000/.
3. Learned counsel for accusedappellant company submits that amount deducted by way of "Tax Deduction at Source" by the said company could not be deposited within the stipulated period due to reasonable excuse and that the same was deposited afterward and that the reasonable excuse was that appellant company was under bad financial situation.
4. When court has inquired from learned counsel for accused appellant to find out any material to suggest that as to by which date company suffered losses which made it unable to pay to the credit of the government. Learned counsel has referred to balance sheet Ex DW1/F which is 3 available in the schedule forming part of the accounts.
On the other hand, learned counsel for complainant has referred to auditor's report dated 25.08.2012 wherein was specifically mentioned that the company had no accumulated loss and had not incurred cash loss in the current financial year and in the immediate preceding financial year. Faced with this report, learned counsel has submitted that the auditor's appears to have submitted this report in routine.
5. In case this report was submitted by the submitted auditor was false and submitted in routine, accused company should have taken steps for its rectification. It appears that no such steps were taken at any point of time.
6. Learned counsel for accusedappellant has referred to provisions of Section 278AA of the Act and submitted that this is a case where there was reasonable cause on the part of the accused - appellant in nonpayment of Tax Deduction at Source to the account of Central Government and as such impugned judgment of conviction deserves to be set aside.
Learned counsel submits that one of the companies, liable to pay about Rs.12 crores to the accused 4 appellant, did not make payment of dues, was declared insolvent. In respect of his submission, learned counsel has referred to decision in Income Tax Officer v. Roshni Cold Storage (P) Ltd. and Ors. decided by Hon'ble Madras High Court on 20.07.1998.
It is true that where a defaulter in payment to the credit of the Central Government so far as Tax Deduction at Source shows some reasonable cause, he shall not be punishable for any failure referred to in Section 276B of the Act. Herein appellant has not been able to establish that there was reasonable cause for such violation.
In the given situation, decision in Roshini Cold Storage's case (supra), cited by learned counsel for the accusedappellant does not come to the aid of the accused appellant.
7. On the point of sentence, learned counsel for accusedappellant submits that lenient view be taken on the point of sentence as the company has been running into loss.
8. Keeping in view the amount of Tax Deducted at Source and period of delay in deposit thereof with the Central Government, court does not find any ground to modify the 5 impugned order on sentence, as regards amount of fine.
9. In view of the above discussion, Court does not find any merit in the appeal. Same is hereby dismissed.
10. Trial Court Record be returned. Appeal file be consigned to Record Room.
Announced in the open Court Digitally signed
by NARINDER
on 12th day of March, 2018 NARINDER
KUMAR
KUMAR
Date:
2018.03.14
12:43:15 +0530
(NARINDER KUMAR)
SPECIAL JUDGE, NDPS - 02 (CENTRAL)
TIS HAZARI COURTS, DELHI