Upendra Narayan, Son Of Kesho Prasad, Resident Of Arya Samaj Mandirroad, Rps More, Flat Number- 202, Shail Regency Apartment, Danapur,Patna, Bihar v. The Principal Chief Commissioner Of Income Tax Bihar And Jharkhand,Central Revenue Building, Birchand Patel Path, Patna.central Revenue Building, Birchand Patel

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.16207 of 2022 ====================================================== Upendra Narayan, Son of Kesho Prasad, Resident of Arya Samaj MandirRoad, RPS More, Flat Number- 202, Shail Regency Apartment, Danapur,Patna, Bihar- 801503. ... ... Petitioner/s Versus 1.The Principal Chief Commissioner of Income Tax Bihar and Jharkhand,Central Revenue Building, Birchand Patel Path, Patna.Central Revenue Building, Birchand Patel Path, Patna. 2.The Assistant Commissioner of Income Tax (Tech), Central RevenueBuilding, Bir Chand Patel Path, Patna- 800001.Building, Bir Chand Patel Path, Patna- 800001. 3.The Income Tax Officer (TDS), Purnea. 4.The State of Bihar through the Secretary, Department of Rural Works,Government of Bihar, Patna.Government of Bihar, Patna. 5.The Secretary, Department of Rural Works, Government of Bihar, Patna. ... ... Respondent/s ====================================================== ====================================================== CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD and HONOURABLE MR. JUSTICE SHAILENDRA SINGHORAL ORDER (Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) 1917-02-2025 Heard Mr. Alok Kumar Jha, learned counsel for the petitioner, Mrs. Archana Sinha, learned senior counsel for thedepartment of Income Tax and Mrs. Archana Meenakshee,learned GP 6 for the State. 2. In the present writ application, the petitioner is praying for the following reliefs:- “ (a) For holding and a declaration thatonce the respondent Secretary, Rural WorksDepartment, Government Of Bihar vide letter number589 Patna dated 21.02.2018 has already decided theresponsibility of all those officers posted andresponsible in the Purnea Works Division Of TheRespondent Department Of Rural Works for non-payment of TDS within the time period prescribed inlaw, the petitioner cannot be picked up individually forprosecution and/or for discharge of liability ofcompounding fee in terms of section 279 (2) of theIncome Tax Act, 1961 (hereinafter referred to as the actfor short) (b) For holding and a declaration that thepetitioner is not the accused in terms of section 278 Bof the act and it is the Department of Rural Works whois accused for such purpose and therefore the petitionercannot be held solely liable on the basis of principle ofvicarious liability for the legal wrong having occurreddue to composite negligence of all those responsibleand already identified by the respondent Secretary,Rural Works Department, Government Of Bihar; (c) For issuance of a writ or order ordirection upon the respondent number 1 to 3 to acceptthe fraction of compounding fee from the petitioner inthe same terms as the apportionment of late fine andinterest directed by the respondent Secretary, RuralWorks Department, Government Bihar in his letternumber 589 Patna dated 21.02.2018 and also todischarge the petitioner from any further liability ofcompounding fee or additional compounding fee of 2%per month upon receipt of such payment; (d) For further restraining the respondentnumber 1 to 3 from instituting any criminal prosecutionagainst the petitioner till the adjudication and disposal of the issue of proportionate liability of compoundingfee payable by the petitioner; (e) For grant of any other relief or reliefsto which the petitioner is found entitled to in the factsand circumstances of the case.” 3.There are some admitted facts of this case. 4. The State of Bihar in it’s Rural Works Department, Dhamdaha Works Division, Purnea was found lacking indeposit of the income tax deducted at source within statutoryperiod during the financial year 2012-13. The Income Taxdepartment initiated action in accordance with law andrecovered Rs. 34,14,450/- from the bank account of theDivision on account of short deduction, interest and late fine.In fact, the said amount has already been recovered. of the issue of proportionate liability of compoundingfee payable by the petitioner; (e) For grant of any other relief or reliefsto which the petitioner is found entitled to in the factsand circumstances of the case.” 3.There are some admitted facts of this case. 4. The State of Bihar in it’s Rural Works Department, Dhamdaha Works Division, Purnea was found lacking indeposit of the income tax deducted at source within statutoryperiod during the financial year 2012-13. The Income Taxdepartment initiated action in accordance with law andrecovered Rs. 34,14,450/- from the bank account of theDivision on account of short deduction, interest and late fine.In fact, the said amount has already been recovered. 5. The Rural Works Department found that theExecutive Officer being the Drawing and Disbursing Authorityof the department was deficient in not depositing the taxdeducted at source, the Income Tax Department had initiatedaction under section 226(3) of the Income Tax Act, 1961 andin the process attached the bank account of the department.Vide letter contained in memo No. 589 dated 21.02.2018 theSecretary, Rural Works Department held that the responsibilityto deduct the amount and deposit the same with the IncomeTax Department is that of the Executive Officer and he is to be assisted in this matter by the Divisional Accounts Officer,Accounts Clerk and Cashier, who are deputed for this purposebut they had shown negligence in carrying out theirresponsibilities, so, they are equally liable to pay the interestand fine amount which have been recovered by the Income TaxDepartment in the ratio of 25% each. Vide the said letter dated21.02.2018 (Annexure-4 to the writ application) the Secretary,Rural Works Department held that the Executive Engineer,Divisional Accounts Officer, Accounts Clerk and Cashier willbe liable to pay the interest and fine amount in equalproportion of 25% each. This decision of the department hadattained finality. 6. The matter did not rest there. It appears that thepetitioner was served with a show cause notice by the IncomeTax Officer (TDS), Purnea vide letter dated 27.12.2016 ascontained in Annexure-‘1’ to the writ application. ThePrincipal Officer within the meaning of section 235 of theIncome Tax Act, 1961 called upon the petitioner to explain asto why a prosecution proceeding under section 276B of theIncome Tax, 1961 be not initiated against him and why notproposal for initiation of prosecution under section 276B/276BB of the Income Tax Act, 1961 be forwarded to the Commissioner of Income Tax (TDS), Patna. 7. The petitioner having received the show cause notice submitted his response vide Annexure-5 to the writapplication. In his response, the petitioner submitted that he is60 yeas of age and he is willing to pay the compoundingcharges, therefore, his request be considered sympatheticallyand the prosecution proceeding be dropped. On receipt of theletter of the petitioner (Annexure-5), the Income Tax Officer,TDS, Purnea wrote a letter dated 09.07.2018 to the PrincipalSecretary, Rural Works Department, Government of Biharwherein he informed the department that Shri UpendraNarayan had written a letter to the Principal ChiefCommissioner, Income Tax, Patna showing his consent forpaying the compounding charges, hence, the sanction ofprosecution under section 197 of the Cr.P.C. may not berequired as the payment of compounding charges is underprocess. Thus, no action was taken against the petitioner, as itappears, the request of the petitioner to deposit thecompounding charge has been accepted by the department. 8. At this stage, it has transpired from the materialson the record that the department has calculated a netcompounding charge payable at Rs. 14,46,328/-. 8. At this stage, it has transpired from the materialson the record that the department has calculated a netcompounding charge payable at Rs. 14,46,328/-. 9. Having worked out the compounding charge, thedepartment called upon the petitioner to deposit the same butvide a letter dated 11.01.2019 (Annexure-9) the petitionerwrote to the Income Tax Officer, TDS that the Rural RoadDevelopment Authority vide notice no. 589 dated 21.02.2018has held that any interest or liability with respect to thedelayed payment of TDS will be borne by four personsequally, who have been held responsible, that is -(i) theExecutive Engineer, (ii) the Divisional Accounts Officer (iii)the Accounts Clerk and (iv) the Cashier. 10. Learned counsel for the petitioner submits thatthe compounding charges are also liable to be apportioned inthe same manner, as has been done in Letter No. 589 dated21.02.2018 with regard to the payment of interest and late fine.It is submitted that since the delay in deposit of TDS tookplace not only because of the negligence of the petitioner, butthe others in the office, who are required to perform theirduties towards deposit of TDS and submission of returns etc.in time, it would not be fair play in action to call upon thepetitioner alone to bear the brunt of the compounding chargeswhich is of the huge amount. 11. Mrs. Archana Sinha, learned counsel for the Income Tax Department submits that so far as the Departmentis concerned, it has to follow the statute and it is only thePrincipal Officer, who would be liable to be proceeded againstby way of prosecution in case of violation of the statutoryprovisions meant for depositing of TDS and filing of returnetc. in time. It is her submission that the petitioner is asking theIncome Tax Department to do something which is notpermissible in law. 12. Learned counsel for the State has referred thecounter affidavit filed on behalf of the State and submits thatso far as this aspect of the matter is concerned, the RuralWorks Department has not taken any specific plea. It issubmitted that prima facie it appears that the statute imposes aresponsibility upon the Principal Officer of the Department todeduct taxes at source and deposit the same with theDepartment. In this case, the Secretary to the Department hasfound that the Divisional Accounts Officer, the Accounts Clerkand the Cashier, who were deputed to assist the petitioner incompliance with these statutory provisions were alsonegligent, therefore, the interest and fine amount have beenapportioned equally among the petitioner, the DivisionalAccounts Officer, the Accounts Clerk and the Cashier, whether the same reasoning and rationale may be followed by theDepartment in the matter of payment of compounding charges,would require a consideration on the part of the Department. 13. Having regard to the submissions notedhereinabove, we are of the considered opinion that so far as theIncome Tax Department is concerned, no mandamus can beissued to them to apportion the amount on account ofcompounding charges among the four persons. The IncomeTax Department has to act in accordance with law and realizethe compounding charges from the persons who may be liableunder the statute, but so far as the Rural Works Department isconcerned, it is always open to it to consider the matter andtake a view, as to whether the compounding charges would beliable to be apportioned among the four persons i.e.- (i) thepetitioner, (ii) the Divisional Accounts Officer, (iii) theAccount Clerk and (iv) the Cashier in the same manner, as hasbeen done in the case of payment of interest and fine amount. 14. Learned counsel for the State has informedthis Court that the petitioner has yet not paid 25% of theamount, which he is liable to pay under Letter No. 502 Dated30.03.2022 of Rural Works Department (Annexure-14) if it isso, it is made clear that this Court has been given to understand Jyoti Kumari-BKS U 14. Learned counsel for the State has informedthis Court that the petitioner has yet not paid 25% of theamount, which he is liable to pay under Letter No. 502 Dated30.03.2022 of Rural Works Department (Annexure-14) if it isso, it is made clear that this Court has been given to understand Jyoti Kumari-BKS U that the petitioner is abiding by the said decision and only onthat premise this case has been been argued on behalf of thepetitioner. The petitioner, therefore, is obliged to abide by hisstatements made before this Court and deposit the said amountwithin a period of four weeks from today, only thereafter, theissue of an apportionment of the compounding charges wouldbe considered by the Secretary, Rural Works Department(Respondent No. 5). 15. This Court is not recording any opinion on thisissue and leave it open to the Respondent No. 5 to consider itin accordance with law after giving appropriate opportunity ofhearing to all the stakeholders. 16. With the aforesaid observations and directions,this writ application is disposed of. (Rajeev Ranjan Prasad, J.) ( Shailendra Singh, J.)