In a recent judgment, the Additional City Civil and Sessions Judge upheld the trial court decision in convicting Company Managing Director for the offense punishable U/s.276B of the Income Tax Act and sentencing them for the said offense.
The Appellant/Accused No. 1 is a registered company under the name Suryodaya Infrastructure Pvt.Ltd and it is engaged in the business of infrastructure projects. Accused No.2 is the Managing Director of the said company. THE deducted TDS amount was Rs.60,78,468/- as per the TDS Returns filed by the company. Accused did not deposit the deducted TDS amount within time. But payment with interest was made on 31.3.2012. Thus there was a delay in remittance of T.D.S. amount exceeding Rs.1,00,000/- (one lakh) thereby committed offense punishable U/s.276B of Income Tax Act. Aggrieved by the conviction and order passed by the trial court, the company approached the Sessions Court.
The Income Tax Officer was examined as a Prosecution Witness. He reiterated the allegations in the complaint against the Appellant/Accused. Thereafter, cognizance was taken against the accused persons. Summons was issued to accused persons.
The Accused put up the defense that no notice in accordance with law was issued to them before initiating proceedings. They further put up the defense that a particular offense was not stated in the notice. Another defense set up by the accused was that deduction of TDS amount with interest was remitted by the accused prior to initiation of criminal proceedings which was also not accepted by the trial court, for the reason that, an amount of tax deduction has to be deposited within given time and late deposit is not a ground to get an exemption from criminal prosecution as per Section 276 B of Income Tax Act.
After much observation, Judge Rajeshwara found that there were no acceptable grounds in the memorandum of appeal to interfere with the well reasoned, legally sustainable impugned judgment and order of conviction of the trial court. Further, the company being Accused No. 1 was sentenced to pay fine of Rs.5,000/- (five thousand) for an offense punishable U/s.276B of the Income Tax Act and Accused No 2 who is the Managing Director of the company was convicted to undergo simple imprisonment for a period of 30 days for the offense punishable U/s.276B of the Income Tax Act. A fine was also imposed on Accused No 2.
Hence the appeal was dismissed due to lack of merits and the order under appeal was found sustainable in law.