Reasonable cause for delayed TDS deposit protected the acquittal, with no appellate interference absent perversity.

Delayed deposit of TDS under Section 276B of the Income-tax Act was treated as excusable where the accused showed reasonable cause under Section 278AA, including financial hardship and documentary support for non-receipt of dues. The Trial Court found the default was not wilful, and the appellate court declined interference because the acquittal was a plausible and reasoned view not shown to be perverse, illegal, or unsupported by the record. On that basis, leave to appeal was declined and the acquittal was left undisturbed.

---

---

Issues: Whether the acquittal of the respondents for failure to deposit TDS within time called for interference in leave to appeal, in the light of the defence of reasonable cause under Section 278AA of the Income-tax Act, 1961.

Analysis: The complaints arose from delayed deposit of TDS under Section 276B of the Income-tax Act, 1961. The respondents had, however, deposited the defaulted TDS amounts with interest before prosecution and relied on documentary material showing financial hardship caused by non-receipt of dues from contracting parties and government agencies. The Trial Court accepted this material and held that the delay was not wilful but was covered by the statutory exception in Section 278AA. In an appeal against acquittal, interference is justified only where the view taken is perverse, illegal, or unsupported by the record. The record disclosed a plausible and reasoned view that the failure occurred for reasonable cause, and no material perversity or misreading was shown.

Conclusion: The acquittal was not liable to be disturbed, and leave to appeal was declined.

Final Conclusion: The prosecution failed to demonstrate any compelling ground to overturn the acquittal, as the respondents' default was held to be excusable under the statutory defence of reasonable cause.

Ratio Decidendi: Where the accused establishes reasonable cause for delayed TDS deposit under Section 278AA of the Income-tax Act, 1961, the statutory bar against punishment applies and an appellate court will not interfere with an acquittal absent perversity or manifest illegality.

---