K C PALANISWAMY Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) IN this petition under Section 482 of the Code of Criminal Procedure 1973 ( Crpc ) two of the accused persons in a criminal complaint, CC No. 444 of 2005 titled Kamal Khanna v. Sidharth Ray and Ors pending in the court of the learned metropolitan Magistrate ( MM ), New Delhi seek the quashing of the said complaint and all proceedings consequent thereto. The two petitioners are k. C. Palaniswamy and R. Karunanithi. The petitions by two other accused, r. Athappan and Gopinath Athapppan, stood withdrawn by them in terms of the order dated 21st February 2006 passed by this Court. The cause title of the present case accordingly reflects this change.

(2.) THE aforementioned complaint was filed by Kamal Khanna, Income Tax Officer (ITO), Ward 49 (4), New Delhi against Data Access (India) Limited ( Company )[arrayed as Accused No. 16] and 16 other persons who were described as Directors or Senior Officers of the said Company. This complaint was filed under Section 279 B read with Section 279 of the Income Tax Act, 1961 ( IT Act ) for the financial year 2003-04 and 2004-05. The allegation in the complaint was that a survey operation under Section 133a IT Act was carried out in the business premises of the Company on 16th September 2004 and the books of accounts of the company for the period 2003-04 onwards were examined. It was found that for the financial year 2003-04, the Company had deducted tax at source under several heads, but had not deposited it with the Government Treasury. The Company was treated as the assessee in default within the meaning of Section 201 (1) and 201 (1a) IT Act. In terms of an order dated 30th November 2004 a demand of rs. 11,69,800/- (TDS Rs. 9,41,18,904 plus interest Rs. 75,60,381/-) was created for the financial year 2003-04. At the time of filing of the complaint on 30th march 2005, the proceedings under Section 201 (1) and 201 (1a) IT Act for the subsequent years were still stated to be under progress.

(3.) A show cause notice was issued on 3rd December 2004 to the Company. It is stated in response thereto on 23rd December 2004 the Company replied as under: the TDS outstanding amount referred to in your above said two letters pertains to the period from 1. 4. 2004 to 31. 3. 2004 and from 1. 4. 2004 to July 2004 in the audited balance sheet of the Company for the year ended 31. 3. 2004 the company showed outstanding liability towards TDS at Rs. 8,61,67,206/- and the current year s TDS liability is Rs. 6,76,69,182/- and the total liability is rs. 15,38,36,388/ -. At the outset, we furnish the list of the persons who, at the time the offence was committed, were in charge of, and were responsible to, the company, Data access (India) Limited for the conduct of the business of the company. These persons were in the management of company until 1. 7. 2004 and thereafter. Some of these persons continued to be in the management of the company even until 29. 10. 2004 1. Mr. Siddartha Ray 2. Mr. Purva Rakesh 3. Mr. Avinash Misra 4. Mr. Surojit Sen 5. Mr. Alok Saha 6. Mr. Deepak Sahai 7. Mr. David Manion 8. Mr. Yuen Tin Fan 9. Mr. Alexander Anthony Arena. So far as TDS outstanding is concerned, as submitted earlier, this liability accrued before 1. 7. 2004 and the directors who were on the Board of the company prior to 1. 7. 2004 are the only persons responsible for the default and we request you to kindly initiate prosecution proceedings against them. We will co-operate with the department in these proceedings.