Court Quashes TDS and TCS Delay Case Citing COVID-19 Restrictions; Relies on Precedent for Justification

The HC quashed the proceedings against the petitioner in 2(c) CC Case No.13 of 2023, where the petitioner was charged with offenses under Sections 276B and 276BB of the Income Tax Act, 1961, for delayed deposit of TDS and TCS amounts. The petitioner attributed the delays to COVID-19 restrictions and had subsequently deposited the amounts with interest. The Court relied on a precedent set in a similar case, where delays were justified, and the proceedings were quashed. The order dated 22.02.2023 was nullified, with no costs imposed.

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The present petition concerns the challenge against the order dated 22.02.2023 passed by the learned Addl. Chief Judicial Magistrate (Special Court), Cuttack in 2(c) CC Case No.13 of 2023, where cognizance for the offenses under Sections-276B and 276BB of the Income Tax Act, 1961 was taken against the petitioner. The complaint alleged that the petitioner failed to deposit TDS and TCS amounts totaling Rs. 59,02,093/- and Rs. 57,27,898/- respectively within the stipulated time frame, with delays ranging from 1 day to 173 days. The petitioner attributed the delays to COVID-19 restrictions at the time, but subsequently deposited the amounts with interest. The petitioner sought quashing of the proceedings, arguing that the delays were justified given the circumstances.The defense relied on a judgment of this Court in a similar case, Sree Metaliks Limited and others vs. Union of India, where delays in depositing TDS amounts were explained and the proceedings were quashed. The defense argued that the present petitioner's case was directly covered by this judgment and Circular No F No 285/90/2008-IT(Inv-I)/05 dated 24.04.2008. The Senior Standing Counsel for the Income Tax Department did not contest the applicability of the judgment to the present case.The Court, after considering the submissions of both parties and the precedent set in the Sree Metaliks Limited case, found merit in the present petition and allowed it. Consequently, the order dated 22.02.2023 and the consequential proceedings in 2(c) CC Case No.13 of 2023 were quashed in favor of the petitioner, with no order as to costs.In summary, the Court considered the circumstances leading to the delays in depositing TDS and TCS amounts, weighed the arguments presented by both parties, and ultimately relied on a previous judgment to quash the proceedings against the petitioner.

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