INCOME TAX OFFICER JIND V. M/S GARG CONSTRUCTION

CRR/75/1993

AI Insights

The case revolves around the allegation that M/s Garg Construction Company failed to deduct and deposit the required TDS on payments made to subcontractors, as mandated by Section 194C(2) of the Income Tax Act. The Income Tax Officer, Jind, challenged the discharge of the company by the Additional Sessions Judge, Jind, who found that TDS had indeed been deducted and deposited, and that the subcontractors' incomes were incorrectly counted as the income of the partnership firm. The High Court dismissed the revision petition, agreeing with the lower court's findings and noting the lack of evidence to support the claim of non-compliance with the TDS provisions.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 684359 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 05-02-2008
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Assessment Order; Discharge; Income Tax; Revision petition; TDS
• Section: 276-B; 278-B; 194(c)(2)

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Criminal Revision No.75 of 1993 Date of decision: February 05, 2008 Income Tax Officer, Jind … Petitioner Versus M/s Garg Construction Company … Respondent CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: None. KANWALJIT SINGH AHLUWALIA, J. (Oral) Additional Sessions Judge, Jind on 15th July, 1991, accepted revision petition of the respondents and held as under: “I have heard the learned counsel for the parties and have gone through the evidence on record and after hearing the same, I am of the view that the order dated 13.12.1990 cannot sustain. The case of the complainant is that the revision petitioners were under legal obligation to deduct 2% amount as income tax on the payments made to the sub- contractors named Pawan Kumar and Om Parkash but no such deductions were made and the payment was not deposited and, as such, provisions of Section 194(c)(2) punishable under Section 278(B) of the Income Tax Act had been violated. In the evidence the complainant had filed assessment order of the Firm relating to that financial year and the same has been exhibited as P.17. A perusal of this assessment order not only proves that TDS (1% deduction called TDS) of Rs.12383/- had been deducted and deposited but it also proves that payment to sub-contractors had been held as bogus and the income of Om Parkash and Pawan Kumar sub-contractors had been counted as income of the Partnership Firm M/s Garg Construction Company, if vide assessment order Ex.P-17, it has been held by Shri M.L. Sabharwal himself that Shri Om Parkash and Shri Pawan Kumar were not the sub-contractors then the question of deduction of TDS at 1% and depositing the same could not have arisen and it could not be said that there was any violation of the provisions of the Income Tax Act. Even otherwise the case of the complainant is that no TDS had been deducted and deposited whereas the assessment order shows that TDS had been deposited and as such, that averment in the complaint is falsified. Under Section 194(C) (2), before launching the prosecution it has to be proved that the TDS has not been deducted and deposited without any reasonable cause of excuse and it is so mentioned in paras No.9 and 10 of the complaint and there is not even an allegation in the evidence that TDS had not been deposited in time without any reasonable cause or excuse.” The Income Tax Officer, Jind has preferred present revision petition challenging discharge of the respondents. None has caused appearance for petitioner. In the grounds of revision, it is stated that since within the specified period, tax deducted was not deposited, therefore, violation of Section 194-C of the Income Tax Act is punishable under Section 276(b). This matter pertains to the assessment year 1986-87 as is evident from ground No.1 of the revision. Period of 22 years has brought disinterest in both petitioner and respondent as none has caused appearance. I have perused the order of Additional Sessions Judge, Jind. There is no infirmity in the same, which calls for interference by the Revisional Court. Hence, present revision petition is dismissed. [Kanwaljit Singh Ahluwalia] Judge February 05, 2008. rps "