Kashish Developers Limited and Ajit Choudhary, alias Ajit Kumar Choudhary and Manor Infraprojects Limited and Arun Kumar Mishra and Indian Progressive Construction Private Limited 'Aashtha' and Jitesh Rajpal V. Union of India, Income Tax Department and The State of Jharkhand

W.P.(Cr.)/646/2024

AI Insights

The case involves multiple writ petitions filed by M/s. Kashish Developers Limited and others, challenging the criminal proceedings initiated against them for delayed deposit of TDS amounts under the Income Tax Act. The petitions were consolidated due to the common questions of fact and law involved. The petitioners argued that the delays were due to acute financial hardships and that all due amounts with interest had been deposited before the issuance of show cause notices. The court referenced a previous judgment (Dev Multicom Pvt. Ltd & Anr. Versus State of Jharkhand & Anr.) and an amendment to the Finance Act, 2024, which provided that prosecution under Section 276(B) would not apply if the TDS had been deposited by the prescribed time. The Income Tax Department and the State of Jharkhand did not contest the facts of timely deposit with interest.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 800159 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 21-11-2024
• Assessment Year: misc
• Other Referred Cases: Dev Multicom Pvt. Ltd & Anr. Versus State of Jharkhand & Anr., Sonali Autos (P) Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KUMAR VAIBHAV; ANURAG VIJAY; DURGESH AGARWAL
• Assessee Lawyers: SUMEET GADODIA; SHILPI GADODIA; NILLOHIT CHUBEY; K HARI; SANYA; AMRITA SINGH
• Keywords: Cognizance quashing; Economic offence; Financial hardship; TDS deposit delay
• Section: 201(1A); 200(3); 279(1); 276-B; 278-B; 278-AA

Judgement Text

" -1- W.P.(Cr.) No. 639 of 2024 & its analogous cases IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(Cr.) No. 639 of 2024 1. M/s. Kashish Developers Limited, (a company registered under the Companies Act, 1956/2013), having its registered office at 87, Old A.G. Colony, Kadru P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 003, through its Managing Director, Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834-003. 2. Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 003. ..... … Petitioners Versus 1. Union of India, Income Tax Department, through Assistant Commissioner of Income Tax, TDS Circle, 3d Floor, Central Revenue Building (Annexe), Main Road, P.O. G.P.O., P.S. Kotwali, District Ranchi (Jharkhand), PIN 834001. 2. The State of Jharkhand. ..... … Respondents with W.P.(Cr.) No. 638 of 2024 1. M/s. Kashish Developers Limited, (a company registered under the Companies Act, 1956/2013), having its registered office at 87, Old A.G. Colony, Kadru P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002, through its Managing Director, Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834002. 2. Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002. ..... … Petitioners Versus 1. Union of India, Income Tax Department, through -2- W.P.(Cr.) No. 639 of 2024 & its analogous cases Assistant Commissioner of Income Tax, TDS Circle, 3d Floor, Central Revenue Building (Annexe), Main Road, P.O. G.P.O., P.S. Kotwali, District Ranchi (Jharkhand), PIN 834001. 2. The State of Jharkhand. ..... … Respondents with W.P.(Cr.) No. 646 of 2024 1. M/s. Kashish Developers Limited, (a company registered under the Companies Act, 1956/2013), having its registered office at 87, Old A.G. Colony, Kadru P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002, through its Managing Director, Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834002. 2. Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002. ..... … Petitioners Versus 1. Union of India, Income Tax Department, through Assistant Commissioner of Income Tax, TDS Circle, 3d Floor, Central Revenue Building (Annexe), Main Road, P.O. G.P.O., P.S. Kotwali, District Ranchi (Jharkhand), PIN 834001. 2. The State of Jharkhand. ..... … Respondents with W.P.(Cr.) No. 653 of 2024 1. M/s. Manor Infraprojects Limited, (a company registered under the Companies Act, 1956/2013), having its registered office at 87, Old A.G. Colony, Kadru P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002, through its Director, Arun Kumar Mishra, aged about 49 years, son of Late Badri Mishra, resident of E.W.S. 142, Harmu Housing Colony, Harmu, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002. 2. Arun Kumar Mishra, aged about 49 years, son of Late Badri Narayan Mishra @ Badhri Mishra, resident of E.W.S. 142, Harmu Housing Colony, -3- W.P.(Cr.) No. 639 of 2024 & its analogous cases Harmu, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 002. 3. Rajeev Kumar, aged about 62 years, son of Late Sachidanand Singh, resident of Ishwari Enclave Flat No. 101, Block-A, Kanke Road, Near Rock Garden, Vidyapati Nagar, Gandhi Nagar, P.O.- Ranchi University, P.S. Gonda, District Ranchi (Jharkhand), PIN 834008. ..... … Petitioners Versus 1. Union of India, Income Tax Department, through Assistant Commissioner of Income Tax, TDS Circle, 3d Floor, Central Revenue Building (Annexe), Main Road, P.O. G.P.O., P.S. Kotwali, District Ranchi (Jharkhand), PIN 834001. 2. The State of Jharkhand. ..... … Respondents with W.P.(Cr.) No. 654 of 2024 1. M/s. Kashish Developers Limited, (a company registered under the Companies Act, 1956/2013), having its registered office at 87, Old A.G. Colony, Kadru P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834003, through its Managing Director, Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834003. 2. Ajit Choudhary, alias Ajit Kumar Choudhary, aged 35 years, son of Shri Sushil Kumar Choudhary, resident of 87, Ratnapriya, Old A.G. Colony, Kadru, P.O. Doranda, P.S. Argora, District Ranchi (Jharkhand), PIN 834 003. ..... … Petitioners Versus 1. Union of India, Income Tax Department, through Assistant Commissioner of Income Tax, TDS Circle, 3d Floor, Central Revenue Building (Annexe), Main Road, P.O. G.P.O., P.S. Kotwali, District Ranchi (Jharkhand), PIN 834001. 2. The State of Jharkhand. ..... … Respondents with W.P.(Cr.) No. 790 of 2024 -4- W.P.(Cr.) No. 639 of 2024 & its analogous cases 1. M/s. Indian Progressive Construction Private Limited \"Aashtha\" Company registered under the Companies Act, 1956, having its office near Gati Devi D.A.V. School, Cestair Town, P.O. & P.S. Deoghar, District Deoghar, PIN 814112 (Jharkhand), thorough its Director namely, Jitesh Rajpal, aged about 48 years, son of Late Mahendar Rajpal, Resident of Shivnath Ray Road, P.O. & P.S. Deoghar, District Deoghar (Jharkhand). 2. Shri Jitesh Rajpal, aged about 48 years, son of Late Mahendar Rajpal, Resident of Shivnath Ray Road, P.O. & P.S. Deoghar, District Deoghar (Jharkhand). ..... … Petitioners Versus Union of India, Income Tax Department, through Sandeep Ganguly, at present posted as Assistant Commissioner of Income Tax, TDS Circle, Dhanbad, having its office at Aaykar Bhawan, Luby Circular Road, Town Dhanbad, P.O. and P.S. Dhanbad (Jharkhand). ..... … Respondent -------- CORAM : HON’BLE MR. JUSTICE SANJAY KUMAR DWIVEDI ------ For the Petitioners : Mr. Sumeet Gadodia, Advocate. : Mrs. Shilpi Sandil Gadodia, Advocate. : Mr. Nillohit Chubey, Advocate. : Mr. K. Hari, Advocate. : Ms Sanya, Advocate. : Ms. Amrita Singh, Advocate. For the Income Tax : Mr. Kumar Vaibhav, Sr. S.C. : Mr. Anurag Vijay, Jr. S.C. : Mr. Durgesh Agarwal, Advocate. For the State : Mr. Binit Chandra, A.C. to A.A.G.-III. : Mr. Amit Raj Kisku, A.C. to G.A.-V. ------ 04/ 21.11.2024 In all these writ petitions, common question of fact and law are involved, in view of that all these writ petitions are being heard together with the consent of the parties. 2. Heard Mr. Sumeet Gadodia, learned counsel appearing for the petitioners, Mr. Kumar Vaibhav, learned senior standing counsel for the Income Tax Department and Mr. Binit Chandra, learned counsel appearing for the State in all these cases. 3. In W.P.(Cr.) No. 639 of 2024, prayer is made for quashing -5- W.P.(Cr.) No. 639 of 2024 & its analogous cases of the entire criminal proceedings including the order taking cognizance dated 01.10.2021, whereby, cognizance for the offence under Section 276-B read with Section 278-B of the Income Tax Act, has been taken against the petitioners, appertaining to financial year 2015-16 corresponding to assessment year 2016-17, in connection with Economic Offence Case No. 03 of 2021, pending in the court of learned Special Judge, Economic Offence, Ranchi. 4. In W.P.(Cr.) No. 638 of 2024, prayer is made for quashing of the entire criminal proceedings including the order taking cognizance dated 19.08.2021, whereby, cognizance for the offence under Section 276-B read with Section 278-B of the Income Tax Act, has been taken against the petitioners, appertaining to financial year 2013-14 corresponding to assessment year 2014-15, in connection with Economic Offence Case No. 01 of 2021, pending in the court of learned Special Judge, Economic Offence, Ranchi. 5. In W.P.(Cr.) No. 646 of 2024, prayer is made for quashing of the entire criminal proceedings including the order taking cognizance dated 19.08.2021, whereby, cognizance for the offence under Section 276-B read with Section 278-B of the Income Tax Act, has been taken against the petitioners, appertaining to financial year 2014-15 corresponding to assessment year 2015-16, in connection with Economic Offence Case No. 02 of 2021, pending in the court of learned Special Judge, Economic Offence, Ranchi. 6. In W.P.(Cr.) No. 653 of 2024, prayer is made for quashing of the entire criminal proceedings including the order taking cognizance dated 24.08.2021, whereby, cognizance for the offence under Section 276-B read with Section 278-B of the Income Tax Act, has been taken against the petitioners, appertaining to financial year 2017-18 corresponding to assessment year 2018-19, in connection with -6- W.P.(Cr.) No. 639 of 2024 & its analogous cases Economic Offence Case No. 11 of 2021, pending in the court of learned Special Judge, Economic Offence, Ranchi. 7. In W.P.(Cr.) No. 654 of 2024, prayer is made for quashing of the entire criminal proceedings including the order taking cognizance dated 01.10..2021, whereby, cognizance for the offence under Section 276-B read with Section 278-B of the Income Tax Act, has been taken against the petitioners, appertaining to financial year 2017-18 corresponding to assessment year 2018-19, in connection with Economic Offence Case No. 04 of 2021, pending in the court of learned Special Judge, Economic Offence, Ranchi. 8. In W.P.(Cr.) No. 790 of 2024, prayer is made for quashing of the entire criminal proceedings including the order taking cognizance dated 15.03.2018, whereby, cognizance for the offence under Section 276-B read with Section 278-B of the Income Tax Act, has been taken against the petitioners, appertaining to financial year 2016-17 corresponding to assessment year 2017-18, in connection with Economic Offence Case No. 20 of 2018 (C.O. Case No. 20 of 2018), pending in the court of learned Special Judge, Economic Offence, Dhanbad. Further challenge is made for quashing of the order dated 02.04.2024, whereby the Miscellaneous Criminal Application No. 8504 of 2023, in connection with Economic Offence Case No. 20 of 2018, has been rejected by the learned court, which was filed for discharge. 9. Mr. Sumeet Gadodia, learned counsel appearing for the petitioners submits that the Economic Offence Case No. 01 of 2021 was filed alleging that the TDS amount of Rs. 4,71,96,070/- was deposited belatedly for the financial year 2013-14. He submits that the Economic Offence Case No. 03 of 2021 was filed on the same ground and alleging that the TDS amount of Rs. 3,39,52,479/- was deposited belatedly for the financial year 2015-16. He further submits that the Economic -7- W.P.(Cr.) No. 639 of 2024 & its analogous cases Offence Case No. 02 of 2021 was filed alleging that Rs. 6,15,81,179/- was belatedly deposited with the Income Tax Department for the financial year 2014-15. He then submits that the Economic Offence Case No. 04 of 2021 was filed with respect to late deposition of TDS amount to the tune of Rs. 4,89,68,712/- for the financial year 2017-18. He also submits that the Economic Offence Case No. 11 of 2021 was filed alleging that the TDS amount of Rs. 1,86,25,894/- was deposited belatedly for the financial year 2017-18. He submits that the Economic Offence Case No. 20 of 2018 (C.O. Case No. 20 of 2018) was filed alleging that the TDS amount to the tune of Rs. 33,65,511/- was deposited belatedly with the Income Tax Department for the financial year 2016-17. 10. Learned counsel appearing for the petitioners in all these cases submits that the petitioner No. 1 in all these cases is the company registered under the Companies Act, 1956/2013 and its Directors are the citizens of India. He submits that all these cases have been registered alleging therein that the TDS amount deducted by the company has been belatedly deposited with the Income Tax Department and the learned court has been pleased to take cognizance under Section 276(B) and Section 278(B) of the Income Tax Act by the different orders. He further submits that the petitioners have been show caused and pursuant to that show cause reply was filed, wherein the petitioners have categorically stated that there was delay in deposit of the TDS amount due to acute financial hardships. He submits that even prior to issuance of the show cause notice, the entire TDS amount with interest has already been deposited with the Income Tax Department by the respective companies. He then submits that this aspect of the matter has already been decided by this court in the case of Dev Multicom Pvt. Ltd & Anr. Versus State of Jharkhand & Anr., reported in 2022 SCC OnLine Jhar 537. He refers to paras-17 and 18 of the said judgment, -8- W.P.(Cr.) No. 639 of 2024 & its analogous cases which is quoted as under:- “17. It is an admitted fact that the TDS amount in all these cases were deposited with interest and the chart with respect to the same is also annexed with the counter affidavit of the Income Tax Department, wherein the date of deduction and date of depositing the said amount has been mentioned. However, some delay occurred in depositing the TDS. Apart from one or two cases, the deducted amount are not more than 50,000/-. While passing the sanction under Section 279(1) of the Act, the sanctioning authority has not considered the CBDT instructions, bearing F. No. 255/339/79-IT (Inv.) dated 28.05.1980, issued in this regard by the CBDT. The CBDT guidelines was considered by the Patna High Court in the case of Sonali Autos (P) Ltd. (Supra) and after considering this guidelines, the Court has interfered with the matter and quashed the entire criminal proceedings. In CBDT instructions, it is mentioned that prosecution under Section 276(B) of the Act shall not normally be proposed when the amount involved and / or the period of default is not substantial and the amount in default has also been deposited in the meantime to the credit of Government. No such consideration will, of course, apply to levy of interest under Section 201(1A) of the Act. This is quoted in the case of Sonali Autos (P) Ltd. (Supra). Moreover after receiving the deducted amount with interest, the prosecution has been launched against the petitioners, which is not in accordance with law. If the petitioners failed to deposit the amount in question within the stipulated time, i.e. by the 7th day of the subsequent month, it was required to launch the prosecution immediately, which has not been done in the cases in hand. Moreover Section 278(AA) of the Act clearly states that no person for any failure referred to under Section 276(B)of the -9- W.P.(Cr.) No. 639 of 2024 & its analogous cases Act shall be punished under the said provisions, if he proves that there was reasonable cause for such failure. The judgment relied by Ms Amrita Sinha, the CBDT guidelines were not considered. On this ground these cases are distinguishable in view of the facts and circumstances of the cases relied upon by Ms. Amrita Sinha. 18. The amount has already been deposited with interest and there is no reason why the criminal proceeding shall proceed and the criminal proceeding was launched after receiving the said amount with interest, had it been a case that the case was immediately instituted and thereafter the TDS amount has been deposited with interest, the matter would have been different. As such the continuation of the proceedings will amount to an abuse of the process of the Court.” 11. Mr. Gadodia, learned counsel appearing for the petitioners submits that the said order of this court was challenged before the Hon’ble Supreme Court in SLP (Crl.) Diary No. 3073 of 2023, wherein the Hon’ble Supreme Court has been pleased to dismiss the said challenge. He further submits that the order of this court was further taken into consideration by the Hon’ble Orissa High Court as well as Hon’ble Bombay High Court and pursuant to that even an amendment is made in the Finance Act, 2024, wherein a proviso has been inserted under Section 276(B) to the effect that if the TDS amount has already been deposited, the prosecution cannot be launched. On these grounds, learned counsel appearing for the petitioners submits that the entire criminal proceedings in all these matters may kindly be quashed. 12. Mr. Kumar Vaibhav, learned senior standing counsel appearing for the Income Tax Department in all these matters submits that so far as the judgment of this court is concerned, the same has already been affirmed up to the Hon’ble Supreme Court and pursuant to -10- W.P.(Cr.) No. 639 of 2024 & its analogous cases that an amendment is there in the Finance Act, 2024. He submits that the amount of TDS was deposited belatedly, which is in higher side and the petitioners are happened to be the habitual in depositing the TDS amount belatedly. 13. Mr. Chandra, learned counsel appearing for the State in respective cases submits that the matters are covered in light of the above judgment. 14. In view of the above submissions of the learned counsel appearing for the respective parties, it is an admitted fact that the TDS amount in question, which is the subject matter of difference economic offence cases as well as C.O. Case, has already been deposited with interest with the Income Tax Department belatedly and the same has not been denied and if such a situation is there, the case of the petitioners are fully covered in light of the judgment of this court in the case of M/s. Dev Multicom Pvt. Ltd (Supra), which has been affirmed by the Hon’ble Supreme Court in SLP (Crl.) Diary No. 3073 of 2023 and pursuant to that in the Finance Act, 2024, the Parliament on his own wisdom has made amendment in Section 276(B), wherein it has been effected as under:- “84. In section 276B of the Income-tax Act, the following proviso shall be inserted with effect from the 1st day of October, 2024, namely:- \"Provided that the provisions of this section shall not apply if the payment referred to in clause (a) has been made to the credit of the Central Government at any time on or before the time prescribed for filing the statement for such payment under sub-section (3) of section 200.\". 15. In view of the above and considering the judgment of this court in the case of M/s Dev Multicom Pvt. Ltd. (Supra), which was -11- W.P.(Cr.) No. 639 of 2024 & its analogous cases affirmed by the Hon’ble Supreme Court and pursuant to that an amendment is there in the Finance Act, 2024 and huge amount of TDS has already been deposited with the Income Tax Department, which has not been denied in the counter affidavit, filed by the Income Tax Department in respective cases, as such, to allow the proceeding to continue will amount to an abuse of the process of law. 16. As such, the entire criminal proceedings and the cognizance orders in their respective cases, passed by the learned Special Judge, Economic Offices, Ranchi, in the respective Economic Offence Cases / C.O. Case, whereby cognizance has been taken against the petitioners for the offences under Sections 276(B) and 278(B) of the Income Tax Act, pending in the Court of learned Special Judge, Economic Offences, Ranchi / Dhanbad, are hereby, quashed. 17. All these writ petitions are allowed and disposed of. (Sanjay Kumar Dwivedi, J.) Amitesh/- [A.F.R.] "