Andhra Pradesh HC quashes prosecution proceedings U/S 276B where there is a reasonable cause for delay in TDS payment:
Aditya Institute Of Technology Vs. The State Of Andhra Pradesh (CP NOs.1207, 1208 and 1212 of 2020)
Facts:
1. The assessee is an educational institution and prosecution proceedings have been lodged against the applicants for the breach of section 276B of the Income Tax Act.
2. The assessee, in the assessment years 2014-15, 2015-16, and 2016-17, had deducted TDS on contract payments, but not credited into the account of the Central Government within time.
3. The assessee deducted amounts of Rs. 32,82,250/-, Rs. 21,31,332/-, and Rs. 10,85,795/-, respectively, u/s 192B, 194A, 194C, and 194J of the Income Tax Act, on different dates, and they were deposited belatedly. Late payment interest U/s 201(1)(a) of the Income Tax Act for assessment years, respectively, has also been paid.
4. The assessee explained that the cause of the delay was because of the late fee reimbursement from the government of A.P., due to which remittance of the amount to the government is delayed.
Hon Andhra Pradesh HC held as below:
1. Section 276 B is included within the fold of Section 278 AA, which expresses that no person will be accountable for punishment for any failure to adhere to Section 276B if he can prove that he was prevented by a reasonable cause for such failure.
2. Thus, if the applicant were enable to designate a reasonable cause amount deposit failure within the prescribed time, there could not be any criminal prosecution.
3. The CIT overlooked the material placed by the taxpayer to show that there was a reasonable cause for their failure to remit the amount within a specified time. Since the taxpayer has paid the tax including late payment interest (although belatedly), no tenable grounds are there to resume the proceedings against the applicants in all three matters, and therefore, the proceedings are liable to be quashed.
The Copy Of the Order as Under:
ms-aditya-institute-of-technology-546043
