TaxTMI 
TaxTMI 
2018 (3) TMI 1316
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....; and (d) pass such other and/or further orders as this Hon'ble Court may deem fit and proper." 2. Impugned order dated 14th March, 2017 passed by the first respondent namely the Commissioner of Income Tax (TDS) Delhi-1 is the sanction for prosecution issued under Section 279(1) of the Income Tax Act, 1961 (Act, for short). 3. Sanction records that during the financial year 2012-13 relevant to the Assessment Year 2013-14, amount of Rs. 3,52,99,059/- was deducted by the petitioner company as tax at source (TDS), but was not deposited in the government treasury within the prescribed statutory time. These defaults were in respect of salary as well as non-salary TDS deductions. 4. Sanction order refers to due date for filing of e-statements in respect of salary or non-salary TDS deductions and the date of actual filing of the statement. Sanction order also refers to the show cause notice dated 5th April, 2016 (sic. 6th April, 2016) issued to the petitioners, as to why they should not be prosecuted under Section 276B and Section 278B of the Act. In response to the notices, authorised representative of the petitioners had appeared and submitted that the petitioner company and his pri....
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....unts are kept centralized and space does not remain a constraint. However, the delay is much more (from 2 month to 11 months) which is not condonable. 3.1 The details of TDS default show that the company was making defaults on a regular way (the delay extending from 2 months to 11 months). The tax liability had arisen on the day the amount was credited as the company was following mercantile system of accounting. The tax which was deducted by the company out of the various expenses incurred was the Government money and the deductor was merely a custodian of the same and was legally bound to deposit the amount of tax within the time specified in the law. It is the legal responsibility of the Principal Officers/Directors to comply with such legal requirement, which he had failed to do. The various Courts have held that the assessee cannot be granted immunity from prosecution merely on the ground that ultimately TDS was deposited in Govt. account albeit lately. In the case of M/s Rishikesh Balkishandas Vs I.D. Manchanda, ITO [1987] 167 ITR 49, the Hon'ble Delhi High Court held that merely because tax has been deposited to the credit of the Central Government before filing of the ....
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....proves that there was reasonable cause for such failure. The second contention raised is that the Sanctioning Authority has failed to correctly apply the Press Note dated 6th August, 2013 and Standard Operating Procedure in the form of instruction F.No.285/90/2008-IT(Inv-I)/05 dated 24th April, 2008 modified by the Central Board of Direct Taxes (CBDT) vide instruction F.No. 285/90/2013-IT(Inv.) dated 7th February, 2013 on the ground that the delay in deposit of TDS did not exceed the prescribed period of twelve months. Further, the petitioners had paid interest on late deposit of TDS prior to issuance of the notice. The findings recorded by the Sanctioning Authority are neither fair nor judicious as they do not take into account the provisions of Section 278AA. 8. Petitioners, do not dispute default and delay in deposit of TDS of more than Rs. 3.53 crore relating to the four quarters between 30th June, 2012 to 31st March, 2013. TDS was belatedly deposited between 30th June, 2013 to 16th September, 2013.The issues raised by the petitioners are ex-facie factual and could constitute defense of the petitioners, as constituting reasonable cause. Onus to prove reasonable cause under Sec....
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....cy or inadequacy of the material before the sanctioning authority and we cannot sit as a court of appeal over the sanction order. The order granting sanction shows that all the available materials were placed before the sanctioning authority who considered the same in great detail. Only because some of the said materials could not be proved, the same by itself, in our opinion, would not vitiate the order of sanction. In fact in this case there was abundant material before the sanctioning authority, and hence we do not agree that the sanction order was in any way vitiated." 12. In State of Karnataka v. Ameerjan [(2007) 11 SCC 273 : (2008) 1 SCC (Cri) 130] it has been opined that: (SCC p. 277, para 9) "9. ... an order of sanction should not be construed in a pedantic manner. But, it is also well settled that the purpose for which an order of sanction is required to be passed should always be borne in mind. Ordinarily, the sanctioning authority is the best person to judge as to whether the public servant concerned should receive the protection under the Act by refusing to accord sanction for his prosecution or not." 13. In Kootha Perumal v. State [(2011) 1 SCC 491 : (2011) 1 SCC (C....
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....he counsel for the revenue and not given our pronouncement or judgment in view of the contentions raised in the writ petition or on merits of the criminal complaint which is pending trial. These issues will have to be examined in accordance with law in the criminal proceedings. Of course, in case the petitioners are able to make out that cognizance was not justified and as per law they can challenge and question the summoning order by way of petition under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 (Code) or if permissible, by way of a petition under Section 482 of the Code. 14. Some controversy was raised regarding non-payment of refunds. There is difficulty in examining this allegation. Petitioners have not impleaded the jurisdictional Assessing Officer and Commissioner as respondents/parties to the writ petition. The Sanctioning Authority is the first respondent and Directorate of Income Tax, Ministry of Finance is the second respondent. The second respondent is not an authority and does not have any legal existence. 15. As per details ascertained by the counsel for the Revenue refunds for the AY 2005-06 stands paid. There is, however, short of c....