Orissa High Court: In a criminal application under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) for quashing the Trial Court’s order, whereby the application of the petitioner seeking discharge from the criminal prosecution initiated by the Revenue was dismissed, the Single Judge Bench of Sibo Sankar Mishra, J. upon noting the Central Board of Direct Taxes’ circular allowing the compounding the offences punishable under Sections 276B/276BB of the Income Tax Act, dismissed the petition with a liberty to the petitioner to approach the Trial Court under the appropriate provision of law for compounding of the offence by relying upon the said Circular dated 17-10-2024 issued by the CBDT.
In the original complaint under Section 190 of the CrPC, the respondent alleged the petitioner had deducted the tax at source (TDS) in respect of various payments of an amount of Rs.2,52,000/- from the payments made to the employees towards salary during month of April 2010 to November 2010 but did not deposit the TDS amount into the Central Government account by the stipulated dues dates i.e., 07-05-2010, however, the said amount was deposited belatedly i.e. on 28-12-2011 after delay of more than 12 months. The Trial Court took cognizance of the offences under Sections 276(B) of the Income Tax Act against the petitioner on the basis of the complaint. Thereafter, the petitioner moved an application for discharge from the said case on the ground that the petitioner deposited the entire TDS amount deducted along with the delayed interest and explained the cause of delay and sought for benefit contemplated under Section 278AA of the IT Act. However, the application for discharge was dismissed.
The Court noted the respondent’s/ tax department’s submission that, the Court should not entertain the petitioner on the face of the recent Circular dated 17-10-2024 issued by the Central Board of Direct Taxes (CBDT), which provides fresh guidelines for compounding of offences under the IT Act. The Court noted that Clauses 4.6 and 8.3 of the said Circular issued by the CBDT provides for- Consolidation of offences: Any application for compounding of offence u/s.276B/276BB of the Act by an applicant for any period for a particular TAN should cover all defaults constituting offence u/s 276B/276BB in respect of that TAN for such period. For the purposes of considering the quantum of TDS defaults, the total default on account of nonpayment of TDS/TCS for a quarter shall be considered by combining the defaults in all the statements filed by the TDS deductor, in respect of the relevant quarter; and
In case an applicant files Compounding application for offences committed u/s 276B/276BB of the Act, in respect of two or more TANs falling in two or more jurisdictions, the jurisdictional authority where the quantum of TDS default is higher shall be the Competent Authority. All other applications shall be transferred to such Competent Authority. Further, in case of any dispute in deciding Competent Authority, the Pr. CCIT having PAN jurisdiction will decide Competent Authority, within 30 days of receipt of such reference, respectively.
Therefore, the Court said that the department has harmonized the entire procedure for compounding all kinds of offences under the IT Act arising out of curable defects. Hence, where the compounding of the offence is permissible under the IT Act, the jurisdiction of this Court under Section 482 of the CrPC may not be necessarily invoked by the petitioner.
Conclusively, the Court suggested the petitioner to resort to the procedural remedy under Section 320 of the CrPC by relying upon the Circular dated 17-10-2024 and seek for compounding of the offences complained off against him by the Revenue.
[Binod Pattanayak v. Union of India, CRLMC No.3284 of 2023, decided on: 07-01-2025]
Advocates who appeared in this case:
For the petitioner: Milan Kanungo, Senior Advocate; S. K. Dwivedy, Advocate
For the respondent: Abinash Kedia, Junior Standing Counsel (Income Tax)
Buy Code of Criminal Procedure, 1973 HERE
