Prosecution for delayed TDS deposits during COVID-19 was deemed unwarranted as the pandemic constituted a 'reasonable cause' for non-compliance.

JUDGMENT :

D.Dash, J.

The Petitioners, by filing this Revision under section-397 read with section-401 of the Criminal Procedure Code; 1973 (for short hereinafter referred to as ‘the Cr.P.C.’) have called in question the legality and propriety of an order dated 02.02.2023 passed by the learned Additional Chief Judicial Magistrate (Special Court), Cuttack in 2(CC) Case No.04 of 2023.

2. On 13.01.2023 the Opposite Party represented by the Assistant Commissioner of Income Tax (TDS), Bhubaneswar filed a complaint alleging commission of offence punishable under section 276B of the Income Tax Act (for short ‘the IT Act’) by the Petitioner No.1, the Private Limited Company, as named and the Petitioner No.2 its Principal Officer-cum-Managing director arraigning them as the accused persons.

The Trial Court by order dated 02.02.2023 has taken cognizance of the offences under sections 276B, section 2(35) and 278B of the IT Act and issued summon to these Petitioners who have been arraigned as accused persons in the said complaint alleging commission of the said offences. The impugned order taking cognizance of the offences alleged to have been committed by these Petitioners (accused persons) passed by the court below is now the subject matter of this present Revision.

I. FACT OF THE CASE:-

3. Facts necessary for the purpose are as under:-

(A) The Petitioner No.1 (Accused No.1) is a Private Limited Company having its registered office at Bhubaneswar has been accorded with the Tax Deduction and Collection Account Number (TAN) to Deduct Tax at Source (TDS) and the Opposite Party No.2 (Accused No.2) is the Director and Principal Officer of the Opposite Party No.1-Company (Accused No.1) who is accountable/responsible for the day to day affairs of Petitioner No.1-Company (Accused No.1) as per the provision of section 2(35) and section 278B of the IT Act.

(B) By the virtue of the same, the Petitioner No.2 (Accused No.2) carries the responsibility to deduct and deposit TDS. As per the System Generated Statement reprieved from the portal, i.e., TDS Reconciliation and Correction Enabling System (TRACES), the Petitioner No.2 (Accused No.2) is said to have deducted a sum of Rs.2,58,29,945.00 for the Financial Year 2020-21 (Assessment Year 2021-22) as TDS. It is stated that the said amount was not deposited with the Central Government by the due dates. The Petitioner are said to have withheld such dues thereby have failed to pay in the account of the Central Government, the collected TDS. However, they have deposited the said amount in phased manner with delay of 31 days to 214 days. Hence, the complaint case, alleging that the Petitioners (accused persons) have committed the offence under section 276(B) of the IT Act punishable with rigorous imprisonment for a term not less than three months and may extend to 7 years and fine for contravention of the provisions contained in chapter-XVII-B of the IT Act and Rule- 30 of the Income Tax Rules, 1962 (for short, ‘IT Rules’), which mandates the deposits to be made by 7^th of the next month and for the deduction for the month of March, the same be deposited by 30^th of April of the next Financial Year. The specific allegation is that the Petitioners have caused delay in depositing the TDS amount in the account of the Opposite Party (Complainant) ranging from 31 days to 214 days. Thus, it is said that the Petitioners (accused persons) have defaulted in depositing the TDS amount in the account of the Opposite Party within the time stipulated under the law.

It is further alleged that the Petitioners (accused persons) hav