Tax deducted at source prosecution barred where notification threshold is unmet; criminal proceedings were quashed as abuse of process.

Delayed deposit of tax deducted at source under section 276B was treated as unwarranted for prosecution where the applicable government notification exempted initiation of proceedings if the cumulative interest under section 201(1A) for the relevant years was below the prescribed threshold and the tax had been credited to the Central Government. On the facts noted, the interest was stated to be below the limit, and the Union's concession supported that view. The criminal prosecution and cognizance order were therefore quashed as an abuse of the process of the Court.

---

---

Issues: Whether the criminal proceedings for alleged delayed deposit of tax deducted at source under section 276B of the Income-tax Act, 1961 were liable to be quashed in view of the Union Government notification exempting prosecution where the cumulative interest under section 201(1A) was below the prescribed limit.

Analysis: The allegation was confined to delayed payment of tax deducted at source, and the amount of tax involved was about Rs. 11,680 with interest stated to be below Rs. 200. The notification placed before the Court indicated that prosecution need not be initiated where the cumulative interest payable under section 201(1A) for the relevant years in respect of tax deducted at source under sections 192 to 195 is less than Rs. 10,000 and the tax has been credited to the Central Government. In light of the notification and the concession from the Union of India, the continuance of the prosecution was considered unwarranted.

Conclusion: The proceedings under section 276B were held to be an abuse of the process of the Court and were quashed.

Final Conclusion: The criminal prosecution and the cognizance order could not be sustained and the entire proceeding was set aside.

Ratio Decidendi: Where the statutory conditions reflected in the applicable governmental notification make prosecution unnecessary for delayed deposit of tax deducted at source, continuation of criminal proceedings under section 276B of the Income-tax Act, 1961 amounts to abuse of the process of the Court and may be quashed.

---