Delhi District Court
Associated Trade Logistics Pvt. Ltd vs C.R.No. 517/2019 Associated Trade ... on 31 March, 2022
IN THE COURT OF MS. NEELOFER ABIDA PERVEEN:
ADDL. SESSIONS JUDGE : (CENTRAL DISTRICT):
TIS HAZARI COURT:DELHI
CNR No. DLCT01-008357-2019
C. R. No. 517/2019
In the matter of:
1. Associated Trade Logistics Pvt. Ltd.
( A company incorporated under Companies Act, 1956)
In Corporate Insolvency Resolution Process
under the Insolvency and Bankruptcy Code, 2016
Having its Regd. Office at
Khasra No. 1976, Main Mandi Road,
Chattarpur, New Delhi- 110030.
2. Mr. Kamlesh Arora,
Ex-Director,
Associated Trade Logistics Pvt. Ltd.
( A company incorporated under Companies Act, 1956)
In Corporate Insolvency Resolution Process
under the Insolvency and Bankruptcy Code, 2016
Having its Regd. Office at
Khasra No. 1976, Main Mandi Road,
Chattarpur, New Delhi- 110030. ....Petitioners
Vs.
C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 1
Income Tax Office
Through Sh. Kamal Kant,
Income Tax Officer,
Ward 73 (2), Room No. 401, 4th Floor,
Aayakar Bhawan, Laxmi Nagar,
New Delhi- 110092 .... Respondent
Date of Institution: 02.07.2019
Date of Judgment: 31.03.2022
JUDGMENT
Vide this order, I shall decide the present revision petition U/s 397/399 Cr.PC, against summoning order dated 11.10.2018, passed by the Court of Sh. Pawan Singh Rajawat, Ld. Ld. ACMM (Special Act), Central District, Tis Hazari Court Delhi in complaint bearing No- 17327/18, titled as Income Tax Office Vs. Associated Trade Logistics pvt. Ltd. and Anr., alongwith an application seeking condonation of delay of 51 days in filing the present revision petition.
1. Ld. Counsel for petitioner/accused contended that the petitioner no.1 is a company duly incorporated under the Companies Act. That during the financial year 2011-2012, Petitioner Company had made payments to various persons and deducted TDS, in the aggregate of Rs. 11,05,604/- but the same amount was not deposited. However, the petitioner C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 2 deposited the said amount with accrued interest for the period of delay as per section 201 (1A) of Income Tax Act, 1961. That infact the petitioner company was facing shortage of funds due to the Income Tax Department as there was huge amount receivable from Income Tax Department to the tune of Rs. 67,05,460 for the period 01.04.10 to 31.03.11 and the same was received by Demand Draft on 03.09.2012 and the amount got credited into the bank account on 05.09.2012 and immediately petitioner deposited the deducted TDS with accrued interest on same day. That the Assistant Commissioner of Income Tax passed an order u/s 2(35) dated 02.04.2014 holding the Petitioner no.2 as a Principal Officer of the Petitioner No. 1. The CIT (TDS) issued a show cause notice dated 17/22.04.2014 u/s 279(1) of the I.T. Act R/w Section 276B of the IT Act to the Petitioner granting an opportunity of being heard. The CIT (TDS) issued other show cause notice dated 05.08.2014, which show cause notice was not received to the petitioners. That the Petitioners replied vide letter dated 10.12.2014 and stated good and sufficient factual reasons for the delay. The said reply of the petitioner was properly served on 11.12.2014, the reply dated 10.12.2014 is on judicial record C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 3 of the trial court. That the CIT (TDS-1), New Delhi has passed sanction vide order dated 30.12.2014 directing to file the complaint in the competent court. That the CIT(TDS-1) has not acknowledged the reply of the petitioner which were duly served upon them and wrongly stated that the petitioners have not provided the reasons sought under both the show cause notices. That the petitioner again wrote letter dated 22.06.2015 to the respondent reiterating the good and factual reasons for the delay. That it is a matter of record that the delay was caused because of the shortage of funds as huge amount was receivable by the Income Tax Department. That the Chief Commissioner of Income Tax (TDS) passed an order dated 28.11.2017 u/s 279(2) of I.T Act, 1961 referring to letter of acceptance dated 05.07.2016 which was issued by the respondent to the petitioner for compounding of offences subject to the payment of Rs. 12,58,767/- within 60 days of receipt of that letter. That the Petitioner had never received the alleged letter of acceptance dated 05.07.2016 and had also not received the copy of the order dated 28.11.2017. That the CIT(TDS) again issued the same show cause notice dated 04.01.2018 and granted time to file reply by 11.01.2018. It was C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 4 submitted that the notice was sent to the old address despite the change of address of the petitioner duly acknowledged by the respondent vide letter dated 01.01.2018 that the petitioner received an incomplete set of the show cause notice dated 04.01.2018. That the petitioner attended the office of the CIT (TDS) on 11.01.2018 and submitted a letter dated 10.01.2018, requesting to provide the mentioned Annexure-A and stated that the petitioners have deposited the deducted TDS along with accrued interest till date. That the CIT (TDS) pased an office order dated 18.04.2018 for initiation of Criminal Complaint against the Petitioners. That the order was passed in violation of the procedure and in contravention of the legal principles by neglecting its own show cause notice dated 04.01.2018 and the reply of the same dated 10.01.2018. That the CIT (TDS-1)has not refer to its show cause notice dated 04.01.2018 and reply thereof in the office order dated 18.04.2018. That the respondent concocted a story of manufactured and self- invented allegations that the Petitioner Company has not deposited the deducted TDS. That the respondents as well the Ld. Trial Court failed to appreciate the provisions under Section 278AA of the Income Tax Act that lays down that no person C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 5 shall be punishable for any failure if he proves that there was reasonable cause for such failure. The Ld. Trial Court failed to appreciate that the petitioners herein in their letter dated 10.12.2014 and 22.06.2015 very clearly apprised the respondent's authority that the delay in deposition of the TDS was on account of shortage of funds as the petitioners had a large sum to be received from the respondent's tax department on account of Income Tax Refund for the financial year 2010- 2011 (AY 2011-2012). That the Ld. Trial Court failed to appreciate the bona fide of the petitioners who paid the entire outstanding amount along with the interest accrued thereon the very day the payment of the outstanding refunds was made by the income tax department, i.e., 05.09.2012. That the Ld. Trial Court also erred in not taking into notice, the financial condition of the petitioners whose affairs has been taken over by the Interim Resolution Professional, appointed by the National Company Law Tribunal. That the Ld. Trial Court ought to have taken into consideration before issuing summons to the petitioners as these conditions duly satisfy the prerequisite conditions of the Section 278AA as there was a very reasonable cause for the petitioner to not pay the due TDS C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 6 amount as the respondent tax department had themselves had not paid the outstanding refunds to the petitioner.
2. The summoning order dated 11.10.2018 is challenged by way of the present revision petition, instituted on 02.07.2019 and is accompanied by an application for condonation of delay. It is contended in the application for condonation of delay that the summoning order dated 11.1.2018 passed by Ld. ACMM was received on 30.01.2019 and the period of limitation was over on 30.04.2019 and thereafter the counsel for petitioners appeared on 04.02.2019 and the complaint copy and the documents were provided by the complainant - respondent only on 02.04.2019 and thereafter the petitioner no. 2 came to know that the respondent has filed a complaint for the offences under Section 276B read with 278B and 278E of I.T. Act against the petitioners on vague and frivolous grounds. Thereafter, application for certified copy was filed on 20.05.2019 and received on 31.05.2019. The Ld. District & Sessions Court, was on vacation from 09.06.2019 to 30.06.2019 and thereby there had occurred a delay of 51 days in filing the revision petition. That the delay is neither intentional nor deliberate.
C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 7
3. As per the own submission of the petitioner, the petitioner/accused is served with the summons on 30.01.2019 and time till 30.04.2019 was available for assailing the summoning order under Section 397/399 CrPC. The delay is sought to be explained on the ground that copy of the complaint and documents were provided on 02.04.2019 and it is only, thereafter, that the accused became aware that complaint U/S 276-B CrPC is instituted on vague and frivolous grounds. I am unable to appreciate this ground sought to be raked. That the complaint is U/S 276-B and 278E of I T Act for the financial year 2011-12 alleging that the accused has not deposited TDS amount in the Government Account within the prescribed time for financial year 2011-2012, is unambiguously clearly and explicit set forth in the summoning order. The petitioner had previously been issued show cause notices to which he had filed replies and availed of personal hearing also in connection with the same default. In such backdrop, the ground that it is only on receipt of complete copy of paper book that he became aware of the grounds, is not a bona fide justification but a sham pretext, and spurious cause.
C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 8
4. Furthermore, having received the complete paperbook, the petitioner then waited till 20.05.2019 to apply for certified copies whiling away the entire prescribed period of limitation. What is discernible is a rather half-hearted attempt at raising a unconvincing premise. Any amount of delay where sufficient cause is shown is capable of being condoned, however, where the litigant is unable to set out reasons explaining the delay occasioned under no manner of approach liberal or strict can even a single day's delay be condoned, for that would render the law of limitation a dead letter.
5. In my humble opinion while appreciating reasonable / sufficient cause, for delay in availing the statutory remedy of appeal and delay in assailing of a summoning order invoking the revisional jurisdiction, differential yardsticks may as well be applied and not uncalled for. While it does not serve the appellant to loose the statutory right to appeal by sitting over his rights and a hyper-technical approach is avoidable for it may result defeating the right to appeal vested in a litigant under the statute, however, when summoning orders are assailed in revision, beyond the period of limitation inevitably the C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 9 proceedings before the trial Court get delayed if not derailed. An unscrupulous litigant resorting to dilatory tactics would first initiate the revision proceedings after the prescribed period taking his chances that notices will be issued, thereby holding hostage the proceedings before the Trial Court. Nevertheless, technicalities should never be allowed to jettison the cause of justice where the order impugned on the face of it suffers from perversity and error apparent on the face of the record and towards that end in in view, I shall briefly touch upon the merits also. The petitioner has challenged the summoning order on the ground that Ld. Trial Court failed to appreciate that petitioner has reasonable cause in terms of Section 278AA for not depositing the TDS collected within the prescribed period as payments of huge amounts was pending with the Income Tax Department due to which the petitioner was cash strapped and as soon as the payment was disbursed by the Income Tax department immediately the petitioner deposited the TDS collected. There was no occasion for the Ld. Trial Court to have considered the reasonable cause that the petitioner / accused seeks to setup for at the stage of summoning of the accused, issuance of process under Section 204, the Magistrate C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 10 concerned is to form an opinion that there are sufficient grounds for proceeding on the basis of the material before it. The reasonable cause for delay in the payment is to be established in defence by the petitioner in the course of the trial.
6. A litigant acting bona fide is expected to be vigilant and diligent in prosecuting his case and where for unavoidable unforeseen circumstances delay is occasioned cogent reasons explaining why the action could not be initiated within the period prescribed by the law are required to be setforth. Where a mere pretext a sham cause is prepounded, for lack of bonafide, such a litigant is disentitled from exercise of discretionary relief in his favour. The petitioner has raked up one such unconvincing plea that though he was served with the summons in January, 2021, however, he became aware of the grounds in April, 2021 only when the entire paperbook was supplied to him, as the record demonstrates that it has been the own vehement contention of the petitioner himself that much prior to the initiation of the proceedings under Section 276B, show cause notices had already been served upon the petitioner and even replied to. In fact it is the grievance of the petitioner that his replies have not been duly considered and the sanction order is C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 11 therefore vitiated. Even after the receipt of the paperbook in April, 2021, the petitioner waited till the last week of May, 2021 to apply for certified copies. Such a lackadaisical approach cannot be condoned.
7. The petitioner has failed to explain the delay of 51 days in filing of the present revision petition and the caused set up from the contents of the application itself on the face of it appears to be a sham pretext. In the absence of sufficient cause there are no grounds for condoning the delay of 51 days in the institution of the present revision petition, hence the application for condonation of delay is hereby dismissed and acordingly the present revision petition itself is dismissed as time barred.
8. Trial Court record be returned alongwith copy of the judgment.
9. File of revision petition be consigned to Record Room.
Announced in the open Court on this 31st March, 2022 (Neelofer Abida Perveen) Addl. Sessions Judge : (Central) Tis Hazari Courts, Delhi C.R.No. 517/2019 Associated Trade Logistic Pvt. Ltd. & Anr. v. ITO Page 12