Alucast Auto Parts Ltd. and Sri Sanjay Bichu V. Union of India, Ministry of Finance, Department of Revenue and Commissioner of Income Tax (TDS) Panaji, Goa and Assistant Commissioner Income Tax Officer, Circle- Panaji

WP/20322/2017

AI Insights

The case involves M/s. Alucast Auto Parts Ltd. and its managing director, Sri Sanjay Bichu, who filed a writ petition against the Union of India and the Commissioner of Income Tax (TDS), Panaji, Goa, challenging an order that sanctioned their prosecution for failing to timely pay deducted tax at source. The petitioners argued that they had filed an application for compounding the offence, which was not considered by the tax authorities. The respondents contended that the petitioners had not utilized the opportunities provided to them, and there were outstanding dues which justified the non-consideration of the compounding application. The court, considering the circumstances and the petitioners' willingness to settle the dues, decided to quash the impugned order and directed the authorities to reconsider the compounding application post the settlement of dues.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 803810 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-07-2023
• Assessment Year: misc
• Laws Referred To: Constitution of India, Code of Criminal Procedure, 1973, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: LAXMAN MANTAGANI; Y V RAVIRAJ
• Assessee Lawyers: SRIRANGA S; K L PATIL
• Keywords: Compounding offence; Income Tax; Quash order; TDS; Writ petition
• Section: 226; 279(1); 482; 227

Judgement Text

" - 1 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 10TH DAY OF JULY, 2023 BEFORE THE HON'BLE MR JUSTICE V.SRISHANANDA WRIT PETITION NO. 20322 OF 2017 (GM-RES) BETWEEN: 1. M/S. ALUCAST AUTO PARTS LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 HAVING ITS OFFICE AT R.S. 664/2, WAGHWADE ROAD, VILLAGE MACHHE, BELGAUM- 590 014, REPRESENTED BY ITS MANAGING DIRECTOR, SRI. SANJAY BICHU. 2. SRI. SANJAY BICHU, MANAGING DIRECTOR, M/S. ALUCAST AUTO PARTS LTD., R.S. 664/2, WAGHWADE ROAD, VILLA MACHHE, BELGAUM- 590 014. …PETITIONERS (BY SRI. SRIRANGA S. AND SRI. K.L. PATIL, ADVOCATES) AND: 1. UNION OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI - 110 001. THROUGH THE SECRETARY. CHANDRASHEKAR LAXMAN KATTIMANI Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Date: 2023.07.13 12:47:03 -0700 - 2 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 2. COMMISSIONER OF INCOME TAX (TDS) PANAJI, GOA, GROUND FLOOR, PUNDALIK NIWAS, RUA-DE-OUREM, PANAJI, GOA- 403 001. 3. ASSISTANT COMMISSIONER INCOME TAX OFFICER, CIRCLE- PANAJI, GROUND FLOOR, PUNDALIK NIWAS RUA-DE-OUREM, PANAJI, GOA- 403 001. …RESPONDENTS (BY SRI. LAXMAN T. MANTAGANI, ADVOCATE FOR R1; SRI. Y.V. RAVIRAJ, ADVOCATE FOR R2 AND R3) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ORDER BEARING F.NO. ALUCAST AUTO/CIT (TDS)/ PROSECUTION/ 2016/17 DTD:24.10.2016 (ANNEXURE-A) PASSED BY THE 2ND RESPONDENT AND AWARD COSTS OF THE PROCEEDINGS. THIS PETITION, COMING ON FOR HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Heard Shri. Sriranga S., for Shri. K. L. Patil learned counsel for petitioners, Shri. Laxman T. Mantagani, learned counsel for respondent No.1 - 3 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 and Shri. Y. V. Raviraj, learned counsel for respondent Nos.2 and 3. 2. The present petition is filed under article 226 of the Constitution of India read with Section 482 of Cr.P.C. with the following prayer: \"Wherefore it is prayed that this Hon'ble Court may be pleased to issue appropriate writ, order or direction against the Respondents and: i. Quash the order bearing F. No. Alucast Auto/CIT (TDS)/Prosecution/ 2016-17 dated 24.10.2016 (Annexure-A) passed by the 2nd respondent; ii. Award costs of the proceedings; iii. Grant such other order as this Hon'ble Court deems fit under the facts and circumstances of the case, in the interests of justice.\" 3. Brief facts of the care are as under: 3.1. The petitioner is an assessee and failed to pay the amount deducted at source in time. As such, proceedings were initiated. The petitioner was given enough opportunity by the - 4 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 Commissioner of Income Tax to compound the offence. However, the petitioner failed to utilize such opportunities as could be seen from the impugned order at Annexure-A. 3.2. Thereafter, the Commissioner of Income Tax exercising his power vested in him accorded the sanction to prosecute the petitioner company and the Principal officer Shri. Sanjay Bichu for the criminal action in terms of Section 279(1) of the Income Tax Act, 1961. Accordingly, proceedings are sought to be initiated before learned Judicial Magistrate, Belagavi. 4. Shri. Sriranga S., learned Senior Counsel representing petitioners submits that he has already filed an application for compounding the offence and the same has not been considered by the respondent authority i.e., the Commissioner of Income Tax and application for compounding the offence be considered in accordance with law and - 5 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 appropriate order be passed by quashing the impugned order at Annexure-A. 5. Per contra, Shri. Y. V. Raviraj, learned counsel representing the Commissioner of Income Tax (TDS) Panaji, Goa and the Assistant Commissioner of Income Tax Officer contended that the opportunity granted to the petitioner was not utilized by the petitioners and the same is evident from the Annexure-A itself. He also points out that there are few more dues of first petitioner company to income tax department and therefore, the compounding of the offence could not be considered. 6. Shri. Sriranga S., learned Senior Counsel representing the petitioners in reply contended that if any legitimate dues are there, the petitioners are willing to pay the such dues and prepared to compound the offence. 7. Since the petitioner has come forward to compound the offence and having regard to the - 6 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 amount due and the precarious situation with which the petitioner company was put to at the time of deductionn of the tax and nonpayment, this Court is of the considered opinion that setting aside the order impugned in the present petition and directing the Commissioner of Income Tax (TDS) Panaji, Goa to consider the application filed seeking compounding of the offence after payment of all legitimate dues to the income tax department would meet the ends of justice. 8. Accordingly, the following order is passed: ORDER Petition is allowed. Impugned order is hereby quashed. The application filed/a fresh application to be filed by petitioners with the Commissioner of Income Tax or any other competent authority under the different circulars of the Income Tax department - 7 - NC: 2023:KHC-D:6953 WP No. 20322 of 2017 shall consider the application seeking compounding of the offences after collecting all legitimate dues and dispose of the same in accordance with law. Sd/- JUDGE SMM List No.: 2 Sl No.: 91 "