HIRA LAL ANUJ V. UNION OF INDIA THRU. ASST. COMMISSIONER OF INCOME TAX LKO AND 2 OTHERS

/8752/2024

AI Insights

The case involves Hira Lal Anuj, the petitioner, challenging a summoning order issued under Section 278-B of the Income Tax Act, 1961, for delayed payment of Tax Deducted at Source (TDS). The petitioner argued that the delay was less than 60 days and the amount was below Rs. 25 Lakhs, thus falling under the non-prosecution circumstances as per a circular from the Department of Revenue. The respondents, represented by the Union of India, contended that the delay in payment warranted penal action under the Act. The court referenced a similar case, M/S Vision India Service Private Ltd, where it was decided that the petitioner could raise these arguments before the trial Court.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 671237 (HC-LUCKNOW)
• Appeal Type: Others
• Pronouncement Date: 27-09-2024
• Assessment Year: misc
• Other Referred Cases: M/S Vision India Service Private Ltd. And Another vs Union of India, Dev Multicom Pvt Ltd Vs. State of Jharkhand, Madhumilan Syntex Ltd Vs. Union of India
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KUSHAGRA DIKSHIT; NEERAV CHITRAVANSHI
• Assessee Lawyers: VIRENDRA BHATT
• Keywords: Circular; Criminal Proceedings; Prosecution; Summoning order; Tax deducted at source
• Section: 278-B

Judgement Text

"Neutral Citation No. - 2024:AHC-LKO:67157 Court No. - 11 Case :- APPLICATION U/S 482 No. - 8752 of 2024 Applicant :- Hira Lal Anuj Opposite Party :- Union Of India Thru. Asst. Commissioner Of Income Tax Lko And 2 Others Counsel for Applicant :- Virendra Bhatt Counsel for Opposite Party :- Kushagra Dikshit Hon'ble Abdul Moin,J. 1. Heard Shri Ankit Pande holding brief of Shri Virendra Bhatt, learned counsel for the petitioner and Shri Neerav Chitravanshi, learned counsel for the respondents. 2. There is consensus at bar that the issue involved in this petition is squarely covered by the judgment of this Court in APPLICATION U/S 482 No. - 8663 of 2024 In re M/S Vision India Service Private Ltd. And Another vs Union of India, decided on 25.09.2024. 3. For the sake of convenience, the order dated 25.09.2024 is reproduced hereunder:- \"Heard Sri R.S.Pandey, learned Senior Advocate assisted by Sri Virendra Bhatt, learned counsel for the applicants and Sri Neerav Chitravanshi, Advocate along with Sri Kushagra Dikshit, learned counsel for all the respondents. Under challenge is the summoning order dated 12.07.2024 passed in Case No. 69143 of 2024 Inre; Union Of India Vs. M/S Vision India Service Private Ltd and Ors. By the said order, the learned trial Court has issued the summons to the applicant under Section 278-B of the Income Tax Act, 1961. Contention of the learned counsel for the applicants is that they had the liability of paying the Tax Deducted at Source amount which admittedly has been paid belatedly and beyond time but for which period they have also paid interest to the department. Despite that upon a complaint being filed by the respondents under the aforesaid provisions of the Act, 1961, learned trial Court has issued the summoning order and hence the petition. Reliance has been placed on the circular dated 09.09.2019 as issued by the Department of Revenue, Central Board of Direct Taxes, Government of India, a copy of which is annexure 8 to the application to contend that in terms of Clause 2 (1) of the said circular failure to pay tax to the credit of the central Government where the non payment of tax deducted at source is Rs. 25 Lakhs or below and the delay in deposit is less than 60 days from the due date, the said case shall not be processed for prosecution in normal circumstances. Contention is that this circular has been considered by the Jharkhand High Court in the case of Dev Multicom Pvt Ltd Vs. State of Jharkhand and Ors- 2022 SCC Online Jhar 537, a copy of which is annexure 9 to the application wherein considering the aforesaid circular, the Jharkhand High Court has held that when the amount has already been deposited with interest as such, there cannot be any reason as to why the criminal proceedings should proceed. Thus, it is contended that once the applicants have already deposited the TDS amount along with the interest consequently, they would be entitled for the benefit of the aforesaid circular and the learned trial Court has patently erred in issuing the impugned summoning order without considering this aspect of the matter. On the other hand, Sri Neerav Chitravanshi, learned counsel appearing on behalf of all the respondents has placed reliance on the judgment of the Apex Court in the case of Madhumilan Syntex Ltd Vs. Union of India- (2007) 160 Taxman 71 (SC) to argue that the Apex Court has held that once the statute requires to pay tax and stipulate period within which the payment is to be made, the payment must be paid within that period and if the payment is not made within that period there is default and an appropriate action can be taken under the Act. Placed reliance on the aforesaid judgment, the argument of Sri Neerav Chitravanshi is that once admittedly the applicants have paid the TDS amount late as such, they are liable for the penal action as provided under the aforesaid provisions of the Act, 1961 and consequently, merely because they paid the interest for the delayed period, the same would not allow them to wriggle out of the strict provisions of the Act, 1961 and the prosecution which has been lodged against them for non compliance of the aforesaid provisions of the Act, 1961. Sri Neerav Chitravanshi also contends that the aforesaid circular may not come to rescue of the applicants inasmuch as the said circular would be applicable in normal circumstances but the applicants herein are habitual defaulter who have repeatedly delayed payment of the TDS amount within the time stipulated. At this stage, Sri R.S.Pandey, learned Senior Advocate appearing on behalf of the applicants states that the instant application may be disposed of with liberty to the applicants to raise the aforesaid argument before the learned trial Court and the learned trial Court may be directed to consider the said objections in accordance with law. To the aforesaid proposition, Sri Neerav Chitravanshi, learned counsel for the respondents has no objection. Accordingly, the instant application is disposed of with the aforesaid liberty.\" 4. Considering the aforesaid, the petition is disposed of. It is provided that the petitioner shall also be entitled to the benefit of the order dated 25.09.2024 passed in the case of M/S Vision India Service Private Ltd. (supra). Order Date :- 27.9.2024 prateek Digitally signed by :- PRATEEK ARORA High Court of Judicature at Allahabad, Lucknow Bench "