A.abdul Azim v. Income Tax Department,Office Of The Commissioner Of Income Tax,Coimbatore

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 18.06.2021 CORAM THE HONOURABLE MR.JUSTICE B.PUGALENDHI Crl.O.P(MD)No.22216 of 2016and Crl.M.P(MD)No.11500 of 2016 1.M/s.Kajah Enterprises Private Limited, A Company with Office at No.48, South Mount Road, Tirunelvlei Town, Tirunelveli – 627 006, represented by Haji Abdul Azees 2.Haji A.Abdul Rahiman Sahib, 3.Haji Abdul Salam 4.Haji A. Abdul Rasheed 5.Haji A.Abdu Azees 6.Haji A.Abdul Rawuf 7.Haji A. Abdul Rafeeq 8.Haji A. Abdul Hzeeb 9.Haji A.Abdul Shafeeq 10.Haji A.Abdul Zuhin 11.A.Anwar Hussain 12.K.Abdul Gafoor 13.A.Abdul Azim Vs. : Petitioners Income Tax Department,Office of the Commissioner of Income Tax,Coimbatore,represented by Deputy Commissioner of Income Tax,TDS Circle,Madurai.: Respondents https://hcservices.ecourts.gov.in/hcservices/ Prayer: Petition filed under Section 482 of the Criminal ProcedureCode, to call for the records and documents in connection withC.C.No.15 of 2016 on the file of the I Additional Chief JudicialMagistrate, Madurai and quash the same. For Petitioners: Ms.Lakhmi GopinathanFor Respondent : Ms.S.Srimathy, ORDER This Criminal Original Petition has been filed seeking toquash the proceedings pending against the petitioners in C.C.No.15of 2016 on the file of the I Additional Chief Judicial Magistrate,Madurai. 2.The petitioners have been charged for the offences underSection 276 B read with 278 B of the Income Tax Act, 1961 on theground that the petitioners paid TDS amount collected from theemployees, belatedly after a period of eight months. Aggrieved overthe same, the present quash petition has been filed. 3.Mrs.Lakshmi Gopinath, learned Counsel for the petitionerssubmits during the year 2012-2013 the company was facing financialconstraints and therefore, salary was paid to the employees only inthe month of September 2012 and only at the time of paying thesalary to their employees, they have deducted the TDS amount andremitted the same to the Income Tax Department with interest for thedelay and therefore, the delay in remitting the TDS amount with thedepartment is not intentional, but only due to financial constraintsfaced by the company. But the authorities without considering thesame has filed the complaint as against the petitioners.The learned Counsel for the petitioners relied on the provisions ofSection 278 AA of the Income Tax Act, 1961, which reads as follows: “Punishment not to be imposed in certain cases: -Notwithstanding anything contained in the provisions ofSection 276-A, Section 276-AB [or Section 276-B], nopersonal shall be punishable for any failure referred toin the said provisions if he proves that there wasreasonable cause for such failure.” 4.The learned Counsel also relied on the provisions underSection 279(2) of the Income Tax Act, which enables the authority tocompound the offence, even before or after the institution of theproceedings. Since the petitioners are having reasonable cause forfailure on their part in remitting the TDS amount in time, prayedfor quashing the charge. 5.Mrs.Srimathy, learned Counsel appearing for the respondentIncome Tax Department would submit that if the petitioners intend toinvoke the provisions under Section 278AA of the Income Tax Act,they shall have to satisfy the authority concerned with relevantmaterials that there was a reasonable cause for such failure for thebelated payment of TDS amount and if any such reasonable cause isestablished before the authority concerned, who shall consider thesame even after the institution of the proceedings under Section 279(2) of the Act. 6.Heard the learned Counsel on either side and perused thematerials placed on record. 5.Mrs.Srimathy, learned Counsel appearing for the respondentIncome Tax Department would submit that if the petitioners intend toinvoke the provisions under Section 278AA of the Income Tax Act,they shall have to satisfy the authority concerned with relevantmaterials that there was a reasonable cause for such failure for thebelated payment of TDS amount and if any such reasonable cause isestablished before the authority concerned, who shall consider thesame even after the institution of the proceedings under Section 279(2) of the Act. 6.Heard the learned Counsel on either side and perused thematerials placed on record. 7.In this case, the petitioners have taken out a reasonablecause for the failure on their part in paying the TDS amount thatdue to financial constraints faced by the company, it was onlyrecorded in the registers, as if salary to the employees was paid,but in fact, the salary was paid to the employees only in the monthof September 2012 and immediately they have also remitted the TDSamount with interest for the delayed payment to the department.However, it is for the competent authority to take a call on thedocuments to be produced by the petitioners for substantiating theircase that they are having reasonable cause for such failure forpayment of the TDS amount and therefore, the matter is remitted tothe first respondent to consider the issue afresh, as per theprovisions under Sections 278AA and 279 (2) of the Income Tax Actand pass appropriate orders on merits and the petitioners arepermitted to produce the documents in their support to the firstrespondent. 8.In the result, the criminal original petition is disposedof with the above direction. Consequently, connected miscellaneouspetition is closed. Assistant Registrar(CS-II) dsk NOTE: In view of the present lock down owing to COVID-19pandemic, a web copy of the order may be utilized forofficial purposes, but, ensuring that the copy of the orderthat is presented is the correct copy, shall be theresponsibility of the advocate/litigant concerned. https://hcservices.ecourts.gov.in/hcservices/ To 1.I Additional Chief Judicial Magistrate, Madurai. Madurai. 2.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai. Madurai Bench of Madras High Court, Madurai. Crl.O.P(MD)No.22216 of 201618.06.2021 DKS(CO)TR(30.06.2021) 4P 3C https://hcservices.ecourts.gov.in/hcservices/