AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1070
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a. During the assessment years 2014-15, 2015-16 and 2016-17, the Accused has TDS on contract payments, but the same were not credited into Central Government's account within time. Accused deducted amounts of Rs. 32,82,250/-, Rs. 21,31,332/- and Rs. 10,85,795/- respectively under Sections 192B, 194A, 194C and 194J on different dates and the same were deposited belatedly. Late payment interest of Rs. 2,72,841/-, Rs. 1,86,743/- and Rs. 43,279/- for above assessment years respectively have also been paid under Section 201(1)(a) of the I.T. Act. b. The Accused has not deposited the tax deducted at source within the stipulated time. As such, show-cause notice was issued on 17.11.2016 calling upon the Accused to furnish the information by 07.12.2016 at 11.00 a.m. Despite receiving the said notice on 21.11.2016, Accused had not chosen to appear before Respondent No. 2. Respondent No. 2 had issued another show-cause notice to the Accused on 19.12.2016 and having received the same, Accused gave a reply on 20.12.2016, but had not appeared before Respondent No. 2. c. Respondent No. 2 had given final show-cause notice to the Accused on 16.01.2018, for which, the Accused ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of Section 276B of I.T. Act. It is stated that it is not the case that the taxes have not been deducted, but it is a case where the Petitioners deducted the tax at source, but not credited the amount to the credit of the Government within time. It is stated that this is a case of belated payment of tax and the Petitioners have clearly mentioned in their explanation that the reason for this delay was due to the delay in fee reimbursement from the Government of A.P., due to which remittance of amount to the Government is delayed. Learned counsel further submits that, no offence has been made out against the Petitioners under Section 276B of I.T. Act and hence, he prayed to quash the proceedings against the Petitioners in all the three cases. 7. Learned Senior Standing Counsel for Respondent No. 2 would submit that the Petitioners have to deduct the tax at source and the same has to be deposited with the Government within the time frame. It is submitted that in the present case, though the Petitioners deducted the tax at source, they failed to deposit the same and that the payment is made with interest. It is stated that the show-cause notices have also been issued by the Comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntral Government account within the stipulated time frame. Petitioners deducted the Rs. 32,82,250/-, Rs. 21,31,332/- and 10,85,795/- for the assessment years 2014-15, 2015-16 and 2016-17 respectively on different dates which were deposited into Central Government Account with a delay. The record further shows that the Petitioners have paid the interest for the late payment as per Section 201 (1) (a) of I.T Act. Show cause notices were issued by the Income Tax Department under Sections 276BB read with 278B of I.T. Act. 12. The proceedings issued by the Commissioner of Income Tax under Section 279(1) of I.T. Act, dated 12.03.2018, would show that, if the Petitioners were able to establish a reasonable cause for failure to deposit the amount within the stipulated time, there cannot be any criminal prosecution. 13. At this juncture, it is relevant to extract Sections 276B and 278 AA of I.T. Act, which read as under: "Section 276B. Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B.- If a person fails to pay to the credit of the Central Government,- (a) the tax deducted at source by him as required by or under the provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t there was a reasonable cause for such failure. Only then the question of prosecution will arise. This is undoubtedly a sufficient safeguard. ." (emphasis supplied) 17. In Banwarilal Satyanarain and others v. State of Bihar and another 1989 SCC OnLine Pat 137; 1990 PLJR 107, the Petitioners approached the Patna High Court against the refusal of a discharge petition in a crime registered under Section 276-B of the I.T. Act. A learned Single Judge of the Court while holding that an assessee should not be prosecuted in case a good and sufficient reason is shown for his failure. The relevant extracts are as follows; "34. So far as the first prerequisite is concerned, even after amendment, the prosecution has to prove the same, but so far as the second prerequisite is concerned, the prosecution is not required to prove the same as effect of the amendment is that now there is a presumption in favour of the prosecution that the accused has no reasonable cause for his failure, of course the presumption is not explicit but the same becomes implicit if section 277B is read along with section 278AA. Why I say so will be apparent from section 278AA which lays down that no....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to mean "adequate, reliable, sound". Similarly, the expression "sufficient" has been defined under the same very Dictionary in volume: X to mean "substantial, of a good standard". 37. From the definitions referred to above, it would appear that reasonable cause or excuse is that which is fair, not absurd, not irrational and not ridiculous. A cause which is reasonable within the meaning of sections 276B and 278AA of the Act may not be sufficient and good reason within the meaning of sections 201 and 221 of the Act as sufficient reason would mean a substantial reason or a reason of good standard would mean a reason which is adequate, reliable and sound. A cause may be reasonable but the same may not be necessarily good and sufficient. On the other hand, if a reason is good and sufficient, the same would necessarily be a reasonable cause. These facts show that the obligation which an accused has to discharge in a criminal prosecution under section 276B of the Act in showing that he had reasonable cause for not deducting the tax or paying the same within time is much more lighter than the obligation to be discharged by him in a penalty proceeding under section 201 read with s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial years 2013-14, 2014-15 and 2015-16 are placed before your for your reference and kind perusal". 20. A fair look at the explanation and reply which was given by the Petitioners to the show-cause notice would reveal that the Petitioners have furnished the information as to when they received the fee reimbursement from the Government relating to the students, whose admissions occupied lion's share i.e., 90%. It appears 90% of the students were admitted on fee reimbursement scheme. That being the case, when the Petitioners filed the documents to show that they have not received fee reimbursement within time and immediately after receiving the fee reimbursement amount, they have remitted the amount to the Government Account, which is conveniently ignored by the Respondent Authorities. 21. A cursory look at the proceedings of the learned Commissioner would show that the Petitioners have not furnished any information to buttress their contention that because of the delay in grant of fee reimbursement by the Government of Andhra Pradesh, they could not remit the amount to the Central Government Account within time. 22. Learned counsel for the Petitioners, in support of their c....