Orissa High Court
973) vs Union Of India ....... Opposite Party on 23 December, 2024
THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.2010 of 2021
(In the matter of an application under Section 482 of the Criminal Procedure Code,
1973)
Jaswant Singh ....... Petitioner
-Versus-
Union of India ....... Opposite Party
For the Petitioners : Mr. Sidhartha Ray, Senior Advocate
For the Opp. Party : Mr. Avinash Kedia, Jr. Standing Counsel
(Income Tax)
CORAM:
THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA
Date of Hearing: 11.09.2024 :: Date of Judgment: 23.12.2024
S.S. Mishra, J.
1. The present Petition is filed by the petitioner under Section 482 Cr.P.C. seeking quashing of the order dated 30.10.2017 passed by the learned Additional Chief Judicial Magistrate (Special Court), Cuttack in 2 (C) C.C. Case No.241 of 2017, whereby the learned Court below has taken cognizance of offence punishable under Section 276(B) of the I.T. Act against the petitioner.
2. The petitioner is one of the Directors of M/s. Braj Mining Corporation Private Limited. The Commissioner of Income-Tax (TDS), Bhubaneswar issued a show-cause notice dated 02.06.2017 to M/s. Braj Mining Corporation Private Limited inter alia calling upon to show cause as to why prosecution under Section 276(B) of the I.T. Act (for short <the Act=) shall not be launched against the company and its Directors for having failed/defaulted in depositing the TDS amount of Rs.13,18,732/- within the statutory period. The Revenue has alleged that the petitioner has caused delay in depositing the TDS amount for the financial year 2013-14 ranging from 03 to 12 months. Hence, show cause notice was issued to the petitioner. The Managing Director of the company namely Mr. Deependra Bahadur Singh had died on 14.10.2019. Therefore, the petitioner being the company has been prosecuted. The petitioner- company vide its reply to the show cause notice on 04.08.2017 inter alia replied explaining the delay:-
<(2)That, Assessee is doing his business in a remote area of Odisha in the mining sector, which has gone through several Page 2 of 21 hurdles during the period under consideration. Mining at several mines have stopped due to investigation by several Government agencies and Commission for irregularity on account of lifting of ore from mines more than the allowed quota, encroachment of forest area, violation rule 37 of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 and several such factors. Bad roads and local politics have further affected the mining activity in the area. In such a condition survival of a mining contractor becomes difficult for the reason that, a. Number of mines where activity of mining carried out got reduced as several mines were closed for operation due to several Government restrictions and sanction.
b. Level of operation (quantitatively) got reduced further reducing the source of income for contractors. c. All the above points reduced the work quantity for the same number of contractors available thereby affecting the business of the contractors.
d. Mine owner used such situation to their advantage by reducing the price of work (cutting the margin of the contractor) and delaying the payment against service provided.
e. There was tremendous pressure from the mine owners to expedite the execution of contracts allotted to the assessee. Assessee succumbed to the pressure of mine owners as there was revenue required to meet the fixed cost. In the process it engaged local transporters and petty contractors to expedite the execution of work. The demand and pressure from them for the payment was also enormous.
3. That, Survival of assessee in the tough situation with huge amount of investment in fixed cost, delay in payment by the contractee and the pressure of payment to the creditors compelled the delay in TDS deposit. Even it became the difficult to collect the outstanding amount from the mine owners. The total sundry debtors as on 31st March 2014 is at Rs.14,41,79,755 with a turnover of Rs.65,68,41,080 which is around 21% of the gross revenue. For the better appreciation of the facts herewith we are enclosing the copy of the audited financial statements of the assessee.
Page 3 of 21
4. That, the assessee is a law abiding company and has tried its best to comply the law. Accordingly, it has deposited the TDS along with the interest whenever it got an opportunity to do so. Although the TDS has been deducted could not be deposited in time to the credit of the Central Govt. Account. However being a bonafide assessee the company had discharged its TDS liability much before of issuance of notice.=
3. The company in which the petitioner is the Director has contended in the reply to the show cause notice that due to sufficient reasons as mentioned above, they could not deposit the TDS amount within stipulated period. The petitioner further urged that by accepting the reasons of delay in depositing and by giving the benefit of 278AA of the Act, the prosecution may not be launched against the assessee, company/petitioner.
4. Without considering the caused shown by the petitioner-company, the Revenue went ahead with the prosecution and instituted 2(C)C.C. Case No.241 of 2017 on 25.10.2017. The learned Court below has taken cognizance of the offence against the petitioner by the impugned order dated 30.10.2017. Hence, the petitioner being one of the Directors of M/s. Braj Mining Corporation Private Limited, the assessee, has filed the Page 4 of 21 present petition on 27.10.2021 assailing the order of cognizance passed by the learned Court below.
5. Heard Mr. Ray, learned Senior Counsel for the petitioner and Mr. Avinash Kedia, learned Junior Standing Counsel for the Income Tax Department.
6. Mr. Ray, learned Senior Counsel for the petitioner submitted that the petitioner has sufficiently explained the reasons for not being able to deposit the TDS amount within time. He contended that the petitioner- company in his show-cause reply had adequately explained the cause of delay of about 03 months to 12 months, in depositing the T.D.S. amount. However, the Income Tax Authority has discarded the sufficient cause and by declining to give the benefit of Section 278AA of the Income Tax Act, proceeded against the petitioner. Learned Senior Counsel has empathetically relied upon the provision of Section 278AA of the Act, which reads as under:-
<278AA. Punishment not to be imposed in certain cases:-
Notwithstanding anything contained in the provisions of section 276A, section 276AB, or section 276B, or section 276BB, no person shall be punishable for any failure referred to in the said provisions if he proves that there was reasonable cause for such failure.= Page 5 of 21 On the strength of the aforementioned provision, he contended that <reasonable cause= shown by the assessee in its reply to the show cause notice ought to have been taken into consideration, however, the Revenue without application of mind has launched the prosecution against the petitioner.
7. Mr. Ray, learned Senior Counsel has strongly relied upon the judgment of this Court dated 15.04.2024 passed in CRLMC No.1921 of 2023 in the case of Sree Metaliks Limited and others vs. Union of Indian and another. He has relied upon the following paragraphs of the said judgment:-
<5. My Ray, learned Senior Counsel to begin with has relied upon a Circular No F No 285/90/2008-IT(Inv-I)/05 dated 24.04.2008 and contended that the benefit of the said Circular ought to have been extended to the petitioners. The relevant part of the Circular reads as under:-
<Subject:- Streamlining of procedure for identification and processing of case for prosecution under Direct Tax Laws- matter reg.-
xxx xxx xxx xxx xxx
2. xxx xxx xxx xxx xxx
3. Identification and processing of potential prosecution cases:
3.1 The following categories of offences shall be processed for launching prosecution:-
(i) Offences u/s 276B: Failure to pay taxes deducted at source to the credit of Central Government Cases, where amount of tax deducted is Rs.25,000 or more, and the same is not deposited even within 12 months from the date of deduction, shall be processed for Page 6 of 21 prosecution in addition to the recovery steps as may be necessary in such cases.
The authority for processing the prosecution under this section shall be the officer having jurisdiction over TDS cases. The prosecution shall preferably be launched within 60 days of such detection. If any such default is detected during search/survey, the processing ADIT/DDIT or the authorized officer shall inform the A.O having jurisdiction over TDS forthwith.=
6. Mr. Ray, learned Senior Counsel to buttress his aforementioned argument, relied upon the judgment of the Jharkhand High Court in the case of Dev Multicom Pvt. Ltd. and another vs. State of Jharkhand and another reported in [2023] 454 ITR 48 (Jharkhand). The relevant portion of the said judgment reads as under:
<The amount has already been deposited with interest and there is no reason why the criminal proceeding shall proceed and the criminal proceeding was launched after receiving the said amount with interest, had it been a case that the case was immediately instituted and thereafter the tax deducted at source amount has been deposited with interest, the matter would have been different. As such the continuation of the proceedings will amount to an abuse of the process of the Court.
Accordingly, the entire criminal proceedings and the cognizance orders in their respective cases, passed by the learned Special Economic Offices, Dhanbad, in the respective C. O. cases, whereby cognizance has been taken against the petitioners for the offences under sections 276B and 278B of the Income-tax Act, pending in the court of the learned Special Judge, Economic Offences, Dhanbad, are hereby, quashed.=
7. Mr. Ray, learned Senior Counsel has also relied upon the judgment of our own High Court in the case of M/s. D.N. Homes Pvt. Ltd., Khurda and another vs. Union of India passed in CRLREV No.408 of 2023, the relevant paragraphs of which reads as under:
<20. The legislative intent would be well discernable when simultaneously, we glance at the provision of section 201 and 221 of the IT Act which says that penalty is not leviable when the Company proves that the default was for 8good and sufficient reasons9, whereas, the expression used in section-278AA is 8reasonable cause9. The legislature has carefully and intentionally used these different expressions in the situations envisaged under those provisions.Page 7 of 21
22. Coming to the case before us, the prosecution has been launched against the petitioners for delay in deposit of the 6 Page 6 of 8 collected TDS for the Financial Year, 2020-21 (Accounting Year, 2021-22). The collected TDS was admittedly not deposited with the Central Government by the due date. The petitioners thus have failed to deposit the collected TDS within the time stipulated as ordained under provision of the I.T. Act and Rules. They have deposited the said amount in phase manner with the delay in making the deposit which begins with the minimum of 31 days, ending at 214 days. It is not in dispute that the petitioners have by the time of consideration of the matter as to launching of the prosecution for such delayed deposit, had deposited the entire TDS with the interest as they were liable to pay as per this statutory provision for such delayed deposit of the TDS. The collected TDS with interest as above has been accepted and gone to the State Exchequer when by then no loss to the Revenue was standing to be viewed.=
8. Mr. Ray submits that in the instant case also the opposite parties have accepted the delayed interest on the TDS amount as per the provision of law and after receiving the TDS amount along with interest initiated the Criminal Prosecution against the petitioners. Therefore, the criminal prosecution launched against the petitioners is not sustainable under law as has been authoritatively held by our own High Court and the High Court of Jharkhand. Apart from that the petitioners are entitled to be exempted for criminal prosecution under the Departmental circular dated 24.04.2008 Therefore, he seeks indulgence of this Court.
9. Mr. Mohapatra, learned Senior Standing Counsel appearing for the Income Tax opposed the prayer made by the petitioners and contended that the distress financial condition of the petitioners company and the COVID-19 pandemic situation cannot be taken as an alibi for late deposit of TDS into the Government account, as the amount was collected on behalf of the Government and due diligence was supposed have been taken for depositing the tax amount within the stipulated time frame.
Mr. Mohapatra further contends that the COVID-19 pandemic restriction measures were only imposed during the month of March, 2020. However, the delay in remittance is not limited to that period. Mr. Mohapatra further contends that the Circular dated 24.04.2008 relied upon by the petitioners will not come to Page 8 of 21 their aid because the delay is beyond one year. The petitioners could have escaped the prosecution, had the delay been within a period of 12 months. In that view of the matter, the sanction accorded by the competent authority under section 279(1) of the Act cannot be faulted with.
10. Taking into consideration the rival contentions of learned counsels for the parties and the judgments relied upon by the petitioners, I am of the considered view that the maximum delay of 394 days for depositing the TDS amount to the revenue account have been well explained by the petitioners, therefore, the authorities ought to have been taken into consideration same, particularly for the reasons that the petitioners/company has suffered the I.B. proceeding and the restriction imposed during the COVID-19 pandemic, I am of the view that the petitioners case is directly covered by the judgments cited in the case of Dev Multicom Pvt. Ltd. (supra) and M/s. D.N. Homes Pvt. Ltd. Khurda & another (supra), because the prosecution indeed has been initiated by the opposite parties against the petitioners after having received the TDs amount along with the interest. Therefore, the entire proceeding arising out of 2(c) CC Case No.09 of 2023 pending in the Court of the learned Additional Chief Judicial Magistrate (Spl.)-cum-Asst. Sessions Judge, Cuttack and the consequential proceedings arising therefrom qua the petitioners stands quashed.=
8. Mr. Ray, learned Senior Counsel also contended that the aforementioned view of this Court has been confirmed by the Hon'ble Supreme Court while dismissing the Special Leave Petition. He has relied upon the order dated 11.07.2024 passed by the Hon'ble Supreme Court in Special Leave Petition (Criminal) Diary No(s).23438 of 2024 in the case of Union of India vrs. M/s. D.N. Homes Pvt. Ltd. & Anr., which reads as under:-
Page 9 of 21
<Delay condoned.
We are not inclined to interfere with the impugned judgment and order of the High Court. The Special Leave Petition is, accordingly, dismissed.= Mr. Ray, submitted that since the view of this Court has been affirmed by the Hon'ble Supreme Court and the present case is squarely covered by the aforementioned judgment of this Court, the present petition deserves merit and liable to be allowed.
9. Per contra, Mr. Avinash Kedia, learned Jr. Standing Counsel for the Income Tax Department submitted that the petitioner being the Director of the accused-company namely M/s. Braj Mining Corporation (P) Ltd., who is the principal officer and accountable/responsible for the day to day affairs of the company as per the provisions of Section 2(35) of the Income Tax Act, 1961. The petitioner was obliged to comply with the provisions of the Income Tax Act, 1961 on behalf of the accused- company. He further submitted that on the basis of the system generated statement retrieved from the portal i.e. TDS Reconciliation Analysis and Correction Enabling System (in short referred as <TRACES=), the petitioner deducted TDS of Rs.11,41,397/- for the financial year 2013-14, but, did not deposit the said TDS amount into the Central Government by Page 10 of 21 the due dates. The petitioner withheld the government due so deducted from TDS and deposited the said amount with delay of 03-12 months, which amounts to an offence under Section 276B of the I.T. Act, 1961.
10. Mr. Kedia, learned counsel further submitted that the petitioner was required to deposit the TDS amount as per Rule 30 of the Income Tax Rules, 1962 and in accordance with the provisions of Chapter-XVII- B into the Central Government Account by 7th of next month and if the TDS is deducted for the month of March, the same should be deposited by 30th of April of the next financial year. In the present case, as per the computerized statement of TDS in respect of Form-26Q, there has been delay in deposit of TDS amount of the Central Government Account for a period ranging from 03 to 12 months.
11. Mr. Kedia, further submitted that the Revenue had issued show cause notice to the petitioner calling upon to explain as to why the criminal prosecution shall not be lodged against the petitioner. The reply submitted by the assessee was completely dissatisfactory. Therefore, rightly the proceeding was initiated. He has submitted that it is an admitted case on facts that the delay has indeed been caused by the Page 11 of 21 assessee in depositing the TDS amount with the Revenue. The statutory provision commands a prosecution lodged against the defaulting cases. He contended that in a taxing statute, there is no room for any intendment; nothing is to be read as implied. The language employed in the statute has to be strictly followed. Since Section 276B of the Act prescribed prosecution for delayed deposit of TDS amount, there was no other option left for the Revenue rather to launch the prosecution against the petitioner. He emphasized the provisions relatable to the prosecution launched against the petitioner, which reads as under:-
<That for better appreciation, the relevant provisions of the Section 276B & 278B of the IT Act, 1961 and relevant portion of Rule 30 are quoted below:-
"276B. If a person fails to pay to the credit of the Central Government,_
(a) the tax deducted at source by him as required by or under the provisions of Chapter XVII-B; or
(b) the tax payable by him, as required by or under-
(i) sub-section (2) of section 115-O; or
(ii) the 32 proviso to section 194B, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.= "278B. Offences by companies. (1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:Page 12 of 21
Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
Xxxxx xxxxxxx xxxxxxxx (3) Where an offence under this Act has been committed by a person, being a company, and the punishment for such offence is imprisonment and fine, then, without prejudice to the provisions contained in sub-section (1) or sub-section (2), such company shall be punished with fine and every person, referred to in sub-section (1), or the director, manager, secretary or other officer of the company referred to in sub-section (2), shall be liable to be proceeded against and punished in accordance with the provisions of this Act.
Explanation- For the purposes of this section-
(a) <company= means a body corporate, and includes:-
(i) a firm; and
(ii) an association of persons or a body of individuals whether incorporated or not;
(b) <director=, in relation to-
(i) a firm, means a partner in the firm;
(ii) any association of persons or a body of individuals, means any member controlling the affairs thereof.
(emphasis supplied) <Rule 30. Time and mode of payment to Government account of tax deducted at source or tax paid under sub-section (1A) of section 192:
(1) All sums deducted in accordance with the provisions of Chapter XVII-B by an office of the Government shall be paid to the credit of the Central Government- (a) on the same day where the tax is paid without production of an income-tax challan9 and
(b) on or before seven days from the end of the month in which the deduction is made or income-tax is due under sub-section (1A) of section 192, where tax is paid accompanied by an income-
tax challan.
(2) All sums deducted in accordance with the provisions of Chapter XVII-B by deductors other than an office of the Page 13 of 21 Government shall be paid to the credit of the Central Government- (a) on or before 30th day of April where the income or amount is credited or paid in the month of March; and(b) in any other case, on or before seven days from the end of the month in which-(i) the deduction is made; or (ii) income-tax is due under sub-section (1A) of section 192.= xxxxxxx xxxxxxx xxxxxxx
12. To buttress his argument, Mr. Kedia, has relied upon the judgment of the Hon'ble Supreme Court in the case of Madhumilan Syntax vrs. Union of India reported in (2007) 11 SCC 297. The Hon'ble Supreme Court in that case has held as under:-
<27. From the above provisions, it is clear that wherever a Company is required to deduct tax at source and to pay it to the account of the Central Government, failure on the part of the Company in deducting or in paying such amount is an offence under the Act and has been made punishable. It, therefore, cannot be said that the prosecution against a company or its Directors in default of deducting or paying tax is not envisaged by the Act.
43. From the statutory provisions, it is clear that to hold a person responsible under the Act, it must be shown that he/she is a 8principal officer9 under Section 2(35) of the Act or is 8in charge of9 and 8responsible for9 the business of the Company or Firm. It is also clear from the cases referred to above that where necessary averments have been made in the complaint, initiation of criminal proceedings, issuance of summons or framing of charge, cannot be held illegal and the Court would not inquire into or decide correctness or otherwise of the allegations leveled or averments made by the complainant. It is a matter of evidence and an appropriate order can be passed at the trial.
44. In the case on hand, in the show cause notice dated March 11, 1991 issued under Section 276b read with Section 278B of the Act, it was expressly stated by the Income Tax Officer, TDS, Bhopal that the Directors were considered to be Principal Officers under Section 2(35) of the Act. In the complaint dated February 26, 1992 Page 14 of 21 filed by the respondent No.2-Commissioner also, it was stated that appellants were considered as Principal Officers. In the above view of the matter, in our opinion, contention of the learned counsel for the appellants cannot be accepted that the complaint filed against the appellants, particularly against appellant Nos.2-4 is ill-founded or not maintainable.
46. In view of the aforesaid discussion, the sanction to prosecute granted by the second respondent cannot be held illegal or unlawful nor the complaint can be held bad in law.
47. The next contention that since TDS had already been deposited to the account of the Central Government, there was no default and no prosecution can be ordered cannot be accepted. Mr. Ranjit Kumar invited our attention to a decision of the High Court of Calcutta in Vinar & Co. & Anr. v. Income Tax Officer & Ors., (1992) 193 ITR 300. Interpreting the provisions of Section 276B, a Single Bench of High Court observed that:-
<there is no provision in the Income Tax Act imposing criminal liability for delay in deduction or for non-payment in time. Under Section 276B, delay in payment of income tax is not an offence.= According to the learned Judge, such a provision is subject to penalty under Section 201(1) of the Act.
48. We are unable to agree with the above view of the High Court.
Once a statute requires to pay tax and stipulates period within which such payment is to be made, the payment must be made within that period. If the payment is not made within that period, there is default and an appropriate action can be taken under the Act. Interpretation canvassed by the learned counsel would make the provision relation to prosecution nugatory.
49. The learned counsel is right in stating that one of the appellants is a female-member. The counsel is also right in contending that in some of the cases referred to by him, this Court held that normally a lady member may not be aware of day to day business of the Firm or the Company. Without laying down general rule, it would be sufficient if we observe that in the case on hand, she was also treated as 8principal officer9 under the Act and hence proceedings cannot be dropped at this stage against her.
Page 15 of 21
50. As to contention that the case is squarely covered by Section 278AA of the Act and that no offence has been committed in view of 8reasonable cause9 shown by the appellants, we may state that the question can be decided on the basis of evidence which would be adduced by the parties before a competent Court. Hence, even that contention, does not detain us.
51. It is true that the Act provides for imposition of penalty for non- payment of tax. That, however, does not take away the power to prosecute accused persons if an offence has been committed by them. A similar contention was raised before this Court in Rashida Kamaluddin Syed & Anr. v. Shaikh Saheblal Mardan (2007) 3 SCC 548, that since a civil suit was filed for recovery of amount, no criminal proceedings could have been initiated. Negating the contention, one of us (C.K. Thakker, J.) stated;
27. Finally, the contention that a civil suit is filed by the complainant and is pending has also not impressed us. If a civil suit is pending, an appropriate order will be passed by the competent Court.= That, however, does not mean that if the accused have committed any offence, jurisdiction of criminal court would be ousted. Both the proceedings are separate, independent and one cannot abate or defeat the other.= He has also relied upon the judgments of other High Courts on the same point.
13. I have given a careful consideration to the submission made by learned counsel for the petitioner as well as the Revenue. This Court has put a query to learned counsel appearing for the Revenue as to whether any deductee has complained regarding non-deposit of TDS amount. This question was put on the premises that the petitioner-company, the Page 16 of 21 assessee, has admittedly deposited the TDS amount along with interest with the Revenue. Therefore, there is no financial loss caused to the Revenue. However, truly the only aggrieved persons are the deductee those who could not avail the benefit of the TDS deduction from their source due to non-deposit of the same by the deductor within time. To answer these queries, learned counsel for the Income Tax Department has stated as under:-
<.................The contractors are situated in different parts across the country and falls under different jurisdictional ITOs and there is no centralized unit. Furthermore the provisions of Income Tax Act & Rules do not provide any mechanism/system for the deductee to raise or lodge a complaint against the deductee for late deposit of TDS. No such statutory form, help desk or grievance cell is available to entertain or redress such grievance. As such, there is no scope for the deductee to raise such a plea.=
14. The aforementioned answer is not specific rather evasive, which leads to only inference that there is no complaint received on behalf of any deductees making any grievance. Notwithstanding the present proceeding being initiated by the Revenue, if any of the deductees is aggrieved, he/she has remedy under general law/common law to prosecute the assesses, who has although deducted the tax from the Page 17 of 21 source but has deposited belatedly, as a result of which, the tax benefit could not be availed by the said deductees.
15. This is an admitted case on facts, the assessee has caused delay ranging from 03 to 12 months in depositing the TDS amount. However, the TDS amount was deposited belatedly with interest. The Revenue after accepting the TDS amount with interest has issued show cause notice, to which the petitioner has adequately replied by explaining the <sufficient reasons= which unavoidingly prevented from depositing the amount timely. The assessee could have availed the benefit of Section 278AA of the Act if the sufficient reasons explaining the delay were taken into consideration. The Commissioner of Income Tax (TDS) has out rightly rejected the cause explained by the assessee regarding the delay. It appears from the record that the competent authority of the Revenue has not even delved upon the <sufficient cause= shown by the assessee explaining the delay.
16. Mr. Kedia, learned counsel for the Revenue has also read out extensively the sanction order dated 13.09.2017 passed by the Commissioner of Income Tax (TDS), Bhubaneswar. He contended that Page 18 of 21 the Commissioner, Income Tax has extensively dealt with all the points raised by the petitioners which have been highlighted in the present petition. The sanction order is just, proper and well within the frame of law. The contention of the petitioner is disputed questions of facts. This could only be thrashed out at the trial stage. Hence, the prayer made by the petitioner in the present petition deserves no merit. Even otherwise the offences are compoundable, hence the petitioner shall surrender to the trial Court jurisdiction and resort to the right remedy. Mr. Kedia hands up a recent Circular dated 17.10.2024 issued by CBDT, which provides fresh guidelines for compounding of offences under the I.T. Act. This Circular harmonized the entire procedure for compounding all kinds of offences under the I.T. Act arising out of curable defects. Clauses 4.6 and 8.3 of the said Circular deal with the offences under Sections 276B/276BB of the Act, those clauses are reproduced for ready reference:
<4.6 Consolidation of offences: Any application for compounding of offence u/s.276B/276BB of the Act by an applicant for any period for a particular TAN should cover all defaults constituting offence u/s 276B/276BB in respect of that TAN for such period. For the purposes of considering the quantum of TDS defaults, the total default on account of non-payment of TDS/TCS for a quarter shall be considered by combining the defaults in all the statements filed by the TDS deductor, in respect of the relevant quarter.Page 19 of 21
8.3 In case an applicant files Compounding application for offences committed u/s 276B/276BB of the Act, in respect of two or more TANs falling in two or more jurisdictions, the jurisdictional authority where the quantum of TDS default is higher shall be the Competent Authority. All other applications shall be transferred to such Competent Authority. Further, in case of any dispute in deciding Competent Authority, the Pr. CCIT having PAN jurisdiction will decide Competent Authority, within 30 days of receipt of such reference.= On the strength of the aforementioned Circular, Mr. Kedia, submitted that since the Department has now formulated a guideline for compounding the offences punishable under Sections 276B/276BB of the I.T. Act, the inherent jurisdiction of this Court under Section 482 Cr.P.C.
is forbidden for such offenders against whom, prosecution has been launched for the said offences.
17. I have given a careful consideration to the submissions made by the parties at the Bar and perused the documents placed before this Court. Perusal of the Circular dated 17.10.2024 issued by the CBDT makes it abundantly clear that the Department has harmonized the entire procedure for compounding all kinds of offences under the I.T. Act arising out of curable defects. Clauses 4.6 and 8.3 as reproduced above clearly deals with the offences for which the petitioner is sought to be prosecuted in 2(C) C.C. Case No.241 of 2017. Therefore, in the present regime, where Page 20 of 21 the compounding of the offence is permissible, the jurisdiction of this Court under Section 482 Cr.P.C. may not be necessarily invoked by the petitioner. In that view of the matter, the petitioner may resort to the procedural remedy under Section 320 Cr.P.C. by relying upon the Circular dated 17.10.2024 and seek for compounding of the offences complained off against him by the Revenue in the 2(C) C.C. Case No.241 of 2017. Mr. Kedia, learned Junior Standing Counsel for the Income Tax precisely submits the same.
18. In view of the same, the petitioner is granted liberty to approach the learned trial Court under the appropriate provision of law for compounding of the offence by relying upon the Circular dated 17.10.2024 issued by the CBDT. If such application is moved before the Court below, the same shall be considered on its merit without being influenced by the observation of this Court in the present order.
19. The CRLMC is, accordingly, partly allowed with liberty as mentioned above.
..................
S.S. Mishra (Judge) Signature Not Verified The High Court of Orissa, Cuttack Dated the 23rd December, 2024/ Swarna Digitally Signed Signed by: SWARNAPRAVA DASH Reason: Authentication Location: High Court of Orissa Date: 10-Jan-2025 18:04:54 Page 21 of 21