..1 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nCNR No. MHMM2000060592014.
\nComplaint filed on :27.11.2014.
\nComplaint registered on:27.11.2014.
\nDecided on :25 .06.2019
\nDuration : Y. M. D.
\n04 06 28.
\nIN THE COURT OF ADDL. CHIEF METROPOLITAN MAGISTRATE,
\n38th COURT, BALLARD PIER, MUMBAI
\n(Presided over by I. R. Shaikh)
\nC. C.NO.209\/SW\/2014.
\nExh. \u2013 52.
\nIncome Tax
\nThrough Pramoda
\nNatraj,
\nage40
\nyrs,
\nIncome Tax Officer(TDS)1(
\n2)(4)
\nMumbai.
\n.. Complainant.
\nV\/s.
\n1. M\/s Ichibaan Automobiles Pvt,
\n9th floor, Grande Palladium,
\n175 CST Road, Kalina,
\nSantacruz (E),
\n2. G.M. Singh,
\nPrincipal Officer,
\nM\/s Ichibaan Automobiles Pvt Ltd,
\n13\/A, Nibbana Annexe, Pali Hill,
\nBandra (W), Mumbai50.
\n.. Accused.
\nCharge : Under Section 276B r\/w sec. 278B of The Income Tax
\nAct,1961.
\nAppearance : Special Public Prosecutor Mr. Amit Munde for
\ncomplainant.
\nLd. Advocate Mr. V.S.Hadade for accused.
\n..2 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nJUDGMENT
\n(Delivered on 25.06.2019)
\n1. The complainant Pramoda Natraj, Income Tax
\nOfficer(TDS)1(
\n2)(4) had filed the complaint u\/s. 200 of the Cr.P.C.
\nagainst the accused for committing the offence punishable u\/s. 276B of
\nIncome Tax Act, 1961 pertaining to financial year 20092010
\nand
\nAssessment year 20102011.
\n2. Brief facts of the complainant’s case are as under The
\ncomplainant submitted that accused No.01 is a private
\nlimited company and accused No.02 is the principal officer of accused
\nNo.01 under obligation u\/sec. 192 of IncomeTax
\nAct to deduct the
\nIncomeTax
\nfrom salary paid\/credited. During the period from
\n01.04.2010 to 31.03.2011 on various dates they deducted tax of Rs.
\n7,52,076\/but
\nfailed to pay or deposit the IncomeTax
\nso deducted to
\nthe credit of the Central Government within the prescribed period. He
\nfurther submitted that accused No.02 being Principal Officer of accused
\nNo.01 are also liable for the same.He further submits that after
\ndeduction of said amount, instead of depositing such TDS amount to
\nthe Government Account within respective dates accused failed, without
\nreasonable cause or excuse, to pay within the prescribe period. He
\nfurther submits that said amount was paid after a long period of delay
\nbeyond 12 months.
\n3. A show cause notice was issued to all the accused but they
\ndid not respond. The complainant submits that accused have committed
\na default u\/sec. 200 and 204 of The IncomeTax
\nAct r\/w rule 30 of The
\nIncomeTax
\nAct, 1962 by failing without reasonable cause or excuse to
\n..3 .. C.C.No.209\/SW\/2014.
\nJudgment.
\npay the IncomeTax
\nso deducted to the credit of the Central
\nGovernment. Hence, he filed present complaint against the accused for
\nthe offence punishable u\/sec. 278B r\/w sec. 278B of The IncomeTax
\nAct, 1961.
\n4. After filing of the complaint, cognizance was taken and
\ncase was registered against the accused for offence punishable under
\nSection 276B r\/w sec. 278B of The Income Tax Act. The process was
\nissued u\/s. 276B r\/w sec. 278B of The Income Tax Act.
\n5. The complainant complied the formalities u\/s. 207 of Cr.
\nP.C. All the documents were furnished to the accused. Thereafter
\nevidence of the complainant and sanctioning authority was recorded
\nbefore charge and thereafter, after hearing both the sides my
\nPredecessor hold that there is sufficient material to frame the charge
\nand accordingly charge was framed against the accused as per Ex.38
\nunder Section 276B r\/w sec. 278B of The Income Tax. Contents of the
\ncharge were read over to the accused in vernacular. Accused pleaded
\nnot guilty and claimed for trial. The plea of the accused is at Ex.39 and
\n40.
\n6. In order to prove the charges leveled against the accused,
\nthe complainant has examined two witnesses. These are C.W.1 Vinod
\nKumar Pande sanctioning authority at Ex.19 and C.W.2 Pramoda
\nNatraj complainant at Ex.24A
\nand placed number of documents on
\nrecord. After closer of evidence of the complainant, statement of
\naccused u\/s. 313 of Cr. P.C. was recorded at Ex.42 and 43. The accused
\ndenied incriminating evidence put to him. The accused submitted that
\n..4 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nTDS amount is not deposited within time due to crunches in company.
\nTDS amount not paid within time is not willful\/deliberately. He has
\nalready filed compounding application to Commissioner of Income Tax
\nand it is under consideration hence prayed that prosecution keep in
\nabeyance till the disposal of the compounding application.
\n7. The following points arise for my determination and I have
\nrecorded my findings against each point with reasons as follows Sr.
\nNo. Points Findings
\n1 Does prosecution prove that, accused No.
\n1. M\/s Ichibaan Automobiles Pvt. Ltd. and
\nits Director i.e. accused No. 2 are
\nresponsible for deduction of Tax at source
\nbut accused failed to pay tax TDS of the
\nFinancial year 20092010
\nand Assessment
\nyear 20102011
\nto the credit of Central
\nGovernment within time without any
\njustifiable reason and thereby committed
\nan offence P\/U\/S. 276B r\/w 278B
\nof The
\nIncomeTax
\nAct
\n..In affirmative.
\n2 What order ? As per final order.
\nREASONS.
\nAs to point No. 1 and 2 :
\n8. In order to prove the guilt against the accused, complainant
\nhas examined Vinod Kumar Pande (C.W.1) sanctioning authority at
\nEx.19 and Pramoda Natraj (C.W.2).
\n9. Vinod (C.W.01) deposed that he had passed sanction order
\nfor prosecution against the accused on 25.11.2014. He had passed
\nsanction order against accused No.01 Ichibaan Automobile Pvt. Ltd and
\n..5 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nits director for the financial year 20092010.
\nHe gave authority to one
\nMs. Pramoda Natraj for launching the complaint against the accused.
\n10. He further deposed that assessee deducted the TDS from
\nvarious payment made to other but assessee\/accused did not deposit
\nTDS with the government within statutory time limit. Therefore
\naccused committed an offence 276 B r\/w. 278 B of I. T. Act. On
\n31.10.2014 accused informed the incharge principal officer of the
\ncompany.
\n11. Pramoda (C.W.02) deposed that he was directed for
\nlaunching complaint against the accused as per sanction order dated
\n25.011.2014. In this matter, he found that TDS was deduction but not
\ndeposited within stipulated time by the assessee i.e. accused. Therefore
\naccordingly income tax accused become a defaulter and he has
\ncommitted an offence under section 194 C and 192 I. T. Act, which is
\npunishable under section 276 B of I. T. Act. On the basis of traces sheet
\naccused have to pay Rs. 7,52,076\/accused
\nhas to pay the said amount
\nin next month, but accused failed to pay within stipulated time. He got
\ntraces sheet from Government website traces this is a public website.
\nFrom traces sheet disclosed the name of accused as Ichibaan
\nAutomobile, for the financial year 20092010.
\nAccused made
\ncorrespondence with their department on 31.10.2014. It disclosed that
\nG.M. Singh is responsible principal officer of the Ichibaan Automobile
\nPvt. Ltd. Accordingly he filed this complaint against accused.
\n12. Special Public Prosecutor Munde argued that, on perusal of
\nthe evidence on record the guilt of accused is proved. The accused
\n..6 .. C.C.No.209\/SW\/2014.
\nJudgment.
\ndeducted the TDS but failed to deposit the deducted tax to the
\nGovernment within stipulated period. The accused admitted said fact
\nduring recording the statement u\/s. 313 of Cr.P.C. as well as in their
\nreply to show cause notice, therefore accused be punished as per law.
\nWhile advocate for accused submitted that before initiating the
\nprosecution, the accused has deposited TDS amount to the department,
\ntherefore the present complaint is not maintainable.
\n13. It is also submitted that during the stipulated period the
\ncondition of the company was not well, the company’s economic
\ncondition was not so good, therefore accused could not paid TDS
\namount within stipulated period. Company have already made the
\npayment of sums deducted by them. This is the first time accused
\ndefaulted for payment of money.
\n14. It is also argued on behalf of accused Advocate that
\nsanction for prosecution was issued without applying mind. Defence
\nalso relied upon section 278E(1) of The IncomeTax
\nAct. It is also
\nsubmitted that non production is fatal to prosecution. In his support
\nAdvocate for accused relied upon following authorities;
\n1) Jamshedpur Engineering and ….. V\/s Union of India
\n(Uoi) and others.1995 214 ITR 556 Patna.
\n2) S.P. Chengalvaraya Naidu (dead) by L.Rs. V\/s
\nJagannath (dead) by L.Rs and others. AIR 1994 Supreme
\nCourt 853.
\n3) Banwarilal Satyanarain and others V\/s State of Bihar and
\nanother 1990 (38) BLJR 5, 179 ITR 387 Patna High Court
\n4) Bachhaj Nahar V\/s Nilima Mandal and another (2008) 17
\n..7 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nSupreme Court Cases 491.
\n5) Sakatar Singh and others V\/s State of Haryana (2004) 11
\nSupreme Court Cases 291.
\n6) Ramesh Singh @ Photti V\/s State of A.P. (2004) 11
\nSupreme Court cases 305.
\n15. It is not disputed that accused had deducted the TDS
\namount of Rs. 7,52,076\/for
\nthe period from 01\/04\/2009 to
\n31\/03\/2010. It is admitted that accused not deposited the said amount
\nwithin stipulated period i.e. on or before 7th day of next month. It is
\nalso admitted position that subsequently out of total amount deducted
\nunder sec. 278E and 194H of the Act accused paid all amount with
\ninterest and penalty as required u\/s. 201(A) of the Act owing to the
\ndelay in payment of the aforesaid amount. Accused paid TDS amount
\nafter 12 months, therefore, there is delay of more than 12 months.
\n16. The complainant during his evidence brought on record
\nfrom Government Web Sites, Traces as per Ex.25 Ex.25 shows that the
\nname of accused mentioned in the report which was for financial year
\n20092010.
\nEx.25 shows total tax deducted Rs. 7,52,076\/from
\n01\/04\/2009 to 31\/03\/2010 and it was deposited in some cases after
\nperiod of more than 12 months. It means, accused not deposited TDS
\namount within stipulated time or deposited beyond the period of 12
\nmonths. The accused not denied the same fact. The accused was
\nresponsible to deposit deducted TDS amount within stipulated time as
\nper section 200 and 204 of the Act and accused committed default.
\n17. Section 277AA provides a window for the accused to
\n..8 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nescape from the penal consequence by proving that he had reasonable
\ncause for the nondepositing
\nof deducted TDS amount within time limit.
\n18. As stated above, Advocate for accused pointed out sec. 277
\nof Act which deals when presumption as to culpable mental state.
\nAdvocate for accused submitted that accused have no mental state or
\nhave no intention to avoid the payment of TDS, if the defence of the
\naccused about existence of such mental state, then burden lies upon
\naccused to prove that they had no such mental state with respect to the
\nact charged as an offence in that prosecution. In the present case there
\nis no evidence that there is no culpable mental state of mind on the part
\nof accused persons, in the failure deposit TDS amount beyond time
\nlimit. There is no evidence at all brought on record, therefore it appears
\nthat accused failed to rebut the presumption lies against them u\/s. 278E
\nof the Act.
\n19. I would like to reproduce here Section 278AA of the Act.
\nIt reads as, \u201cpunishment not to be imposed in certain cases Notwithstanding
\nanything contained in the provisions of sec. 276A,
\n276AB or 276B, no person shall be punishable for any failure referred to
\nin the said provisions if he proves that there was reasonable cause for
\nsuch failure.
\n20. Advocate of accused contended that accused has given
\nreason for failure to pay tax in time due to financial crises. But accused
\nduring trial not proved the same. The accused taken defence that
\nfinancial constrains resulted in not depositing of TDS amount but
\nexcept putting suggestions and say filed on record no material is
\n..9 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nproduced to substantiate the fact. Mere taking up the contention is not
\namounting to offering a reasonable cause for failure to remit the
\ndeducted TDS. Also during sanction considered and examined carefully
\nall records and thereafter after satisfied adequate ground, grant
\nsanction for prosecution against accused. The accused nor proved that
\nthere was reasonable cause for not depositing the aforesaid tax amount
\nwithin specified time limit.\u201d
\n21. It is further argued as stated above on behalf of accused
\nthat, in the reply to show cause notice the accused gave the reasons for
\nnonpayment
\nof taxes but the Principal Commissioner of Income Tax
\nhas not go through it and not considered the same as reasonable cause
\nfor non paying TDS to the Government. But during granting sanction,
\nthe Principal Commissioner of Income Tax as per Ex.21 specifically
\nmentioned that he has gone through the documents and after perusing
\nand examining carefully, he was satisfied that adequate grounds exist to
\nprosecute the accused. Thus, the contention of defence about concerned
\nauthority is not considered cause to grant prosecution is not tenable and
\nproper.
\n22. Hence it clears that accused gave an opportunity for
\nexplaining nonpayment
\nof tax but accused not availed the same.
\nTherefore accused not given reasonable cause for delayed payment of
\ntax.
\n23. From the above discussion it is clear that it is admitted by
\nthe accused that accused not paid deducted TDS amount within
\nstipulated time. No doubt, in the present case, accused paid the tax
\n..10 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nwith interest and penalty, but tax was paid after stipulated period. The
\naccused preferred the application for compounding the offence before
\nconcern authority where as per act the powers of compounding was
\nonly given to Commissioner of IncomeTax,
\nbut it is seen that no such
\ncompounding order has passed. Also sanction granted by sanctioning
\nauthority after considering the documents and applying mind. After
\nconsidering all the material facts before the court and the defence of the
\naccused about reasonable cause is not probable. The accused has
\ndefaulted to pay the tax within stipulated time to the Central
\nGovernment from the TDS amount for the financial year 01\/04\/2009 to
\n31\/03\/2010 and accused is the only person to pay the said amount. No
\ndoubt in the present case the accused has deposited the TDS amount at
\nbelated stage.
\n24. The advocate for the complainant relied on the authority
\nreported in Madhumilan Syntex Ltd; and Ors. v\/s Union of
\nIndia(UOI) and Ors. AIR 2007 SC (148). The Hon’ble Apex Court in
\npara. 37, 40 and 41 held that 37
\n\u201c
\nOnce a statute requires to pay tax and stipulates period within
\nwhich such payment is to be made, the payment must be made within
\nthat period. If the payment is not made within that period, there is
\ndefault and an appropriate action can be taken under the Act.\u201d
\n40 \u201c
\nIt is true that the Act provides for imposition of penalty for non
\npayment of tax. That, however, does not take away the power to
\nprosecute accused persons if an offence has been committed by them.\u201d
\n41 \u201c
\nFinally, the contention that a civil suit is filed by the complainant
\nand is pending has also not impressed us. If a civil suit is pending, an
\nappropriate order will be passed by the competent Court. That,
\n..11 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nhowever, does not mean that if the accused have committed any
\noffence, jurisdiction of criminal court would be ousted. Both the
\nproceedings are separate, independent and one can not abate or defeat
\nthe other.\u201d
\n25. In view of aforesaid reasons arguments advanced on behalf
\nof defence holds no ground. Defence utterly failed to prove the
\nsubmissions by leading evidence as stated above. Considering the above
\nreferred authority and the present case, it appears that if the payment is
\nmade at belated stage then it will be treated as default and appropriate
\naction can be taken under this Act. It also clear that deposit of TDS
\nwith delay does not absolve criminal liability. If it is considered that
\naccused paid the amount after period of 12 months, in such
\ncircumstance, complaint is maintainable and it does not absolve
\ncriminal liability of the accused persons.
\n26. Nothing has come on record during searching crossexamination
\nof both witnesses. Nothing has brought on record during
\ncrossexamination
\nto disbelieve version of above both witnesses.
\nTherefore, considering the evidence available on record, I come to
\nconclusion that the accused is responsible person to pay tax within time
\nand accused failed to deposit TDS within time. Therefore, the
\ncomplainant has proved the case against the accused beyond reasonable
\ndoubt and proved the guilt of the accused u\/s. 276B r\/w 278 B of I.T.
\nAct. Therefore, I answer point no.1 in affirmative. I heard the accused
\non the point of sentence.
\n27. Heard accused, advocate and Special P.P. Shri.
\n..12 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nMunde on the point of sentence. Accused submitted that this is their
\nfirst offence and they have already paid tax amount with interest and
\npenalty. While advocate for accused submitted that this is their first
\noffence and leniency be shown to accused. On the other hand, Ld.
\nSpl.P.P. Munde submitted that accused are the educated persons and
\nthey had sufficient amount to pay TDS amount, but they failed to do
\nso and used said amount for any other purpose, therefore this aspect
\ncannot be viewed lightly and prayed for punishment as per law.
\n28. The offence U\/sec. 276B r\/w 278B of IncomeTax
\nAct 1961 is punishable with rigorous imprisonment which shall not be
\nless than three months which may extend to 7 years and with fine.
\nThe matter is on record not substantiate the contention of accused
\nthat due to financial crunches and fund problems constrains resulted
\nin not depositing TDS amount. However, there is no allegation that
\naccused is irregular in paying the tax other than the case in hand.
\nThus, the Court is of the considered view that accused are liable for
\npossible sentence of 3 months rigorous imprisonement and fine. It is
\nthe minimum punishment. The Court is not having discretion in
\nreducing the sentence. Therefore, accused shall undergo
\nimprisonment for a period of 3 months and fine of Rs.5,000\/(
\nRs.
\nFive Thousand only) each for having committed offence U\/sec. 276B
\nr\/w sec. 278B of IncomeTax
\nAct. So accused No. 1 should pay fine of
\nRs.5,000\/(
\nRs. Five Thousand only). From the above said reasons
\nand discussions, my findings recorded as to point No.1&2 in the
\naffirmative and proceed to pass the following order.
\n..13 .. C.C.No.209\/SW\/2014.
\nJudgment.
\nORDER.
\ni. Accused No. 1 and 2 are convicted for the offence
\npunishable U\/sec.276B r\/w 278 B of The IncomeTax
\nAct, 1961. U\/sec.
\n248(2) of The Code of Criminal Procedure.
\nii. The accused No. 1 M\/s. Ichibaan Automobiles Pvt Ltd, is
\nsentenced to pay fine of Rs.5,000\/(
\nRs. Five Thousand only) for the
\noffence punishable U\/sec. 276 B of IncomeTax
\nAct, 1961.
\niii. The accused No. 2 shall undergo rigorous imprisonment for
\na period of three months and to pay the fine of Rs.5,000\/(
\nRs. Five
\nThousand only), in default of payment of fine, the accused No.2 shall
\nundergo simple imprisonment for a period of 30 days for the offence
\npunishable U\/sec. 276B of The IncomeTax
\nAct, 1961.
\niv. The accused No. 2 shall pay the fine imposed on accused
\nNo.1.
\nv. Bail bonds of accused shall stands surrendered.
\nvi. Copy of Judgment be provided to the accused on free of
\ncosts.
\nvii. Dictated and pronounced in open Court, before parties and
\ntheir counsels.
\nSd x.x.x
\nDate:25.06.2019. ( I.R.Shaikh )
\nAddl. Chief Metropolitan Magistrate,
\n38th Court, Ballard Pier, Mumbai.
\nDictated on screen on 25.06.2019.
\nSigned on 25.06.2019.<\/p>\n","protected":false},"excerpt":{"rendered":"
In view of aforesaid reasons arguments advanced on behalf of defence holds no ground. Defence utterly failed to prove the submissions by leading evidence as stated above. Considering the above referred authority and the present case, it appears that if the payment is made at belated stage then it will be treated as default and appropriate action can be taken under this Act. It also clear that deposit of TDS with delay does not absolve criminal liability. If it is considered that accused paid the amount after period of 12 months, in such circumstance, complaint is maintainable and it does not absolve criminal liability of the accused persons<\/p>\n