2023 (10) TMI 279 - HC - Income Tax

Court quashes case for lack of prima facie evidence, cites jurisdictional issue, directs complainant to tax authority.

M/s. Varaha Infra Ltd & Ors. Versus M/s. Greatful Infrastructures Pvt. Ltd.

M/s. Varaha Infra Ltd & Ors. Versus M/s. Greatful Infrastructures Pvt. Ltd. - TMI Issues Involved:1. Quashing of the impugned proceeding.2. Allegations of non-deposit of TDS amount.3. Territorial jurisdiction and compliance with Section 202 Cr.P.C.4. Existence of prima facie case and abuse of process of law.Summary:Issue 1: Quashing of the Impugned ProceedingThe petitioners sought to quash Complaint Case No. CNS/376 of 2019 under Sections 120B/420/406 of the Indian Penal Code, pending before the 12th Court of Metropolitan Magistrate at Calcutta, alleging abuse of the process of law.Issue 2: Allegations of Non-Deposit of TDS AmountThe complainant alleged that the accused assured the deposit of TDS amounting to Rs. 48,08,840/- with the authority concerned but failed to do so, resulting in wrongful loss to the complainant and wrongful gain to the accused. The accused denied these allegations, claiming full payment to the complainant and that the complaint was malicious.Issue 3: Territorial Jurisdiction and Compliance with Section 202 Cr.P.C.The petitioners argued that no inquiry under Section 202 Cr.P.C. was conducted despite the accused residing outside the territorial jurisdiction of the Magistrate. The court noted that the mandatory provision of Section 202 Cr.P.C. was not complied with, as the accused resided in Rajasthan, outside the jurisdiction of the Kolkata court.Issue 4: Existence of Prima Facie Case and Abuse of Process of LawThe court observed that there was no prima facie case against the petitioners for the alleged offenses under Sections 406/420/120B IPC. The court highlighted that the proper approach for the complainant was to inform the Income Tax Authority, as the assessee is not liable for the deposit of TDS. The court noted the absence of essential ingredients to constitute the offenses alleged and found the proceedings to be an abuse of the process of law.Conclusion:The court allowed the revisional application, quashing the impugned proceedings and all orders passed therein, deeming it a sheer abuse of the process of law. All connected applications were disposed of, and the interim order was vacated. The judgment was directed to be sent to the learned Trial Court for compliance.