BHARATHIRAJA HOSPITALS AND RESEARCH CENTRE PVT. LTD Vs. DEPUTY COMMISSIONER OF INCOME TAX, TDS CIRCLE, CHENNAI

JUDGEMENT

(1.) The petitions have challenged the complaints on the file of the Additional Chief Metropolitan Magistrate, Economic Offences - I, Egmore, Chennai under Sec. 276 B r/w 278 B of the Income Tax Act, 1961.

(2.) It is alleged in the complaints that the first petitioner had deducted TDS from the payments made to various parties. However, after deducting the tax at source, the petitioners failed to deposit the tax to the credit of the Central Government within the prescribed time. The impugned complaints pertain to three different Assessment Years. It is alleged that in all the three Assessment Years, the petitioners had delayed the deposit of tax deducted at sources and therefore, they were liable for offence under Sec. 276 B r/w 278 B of the Income Tax Act.

(3.) The learned counsel for the petitioners would submit that the second and third petitioners are aged above 70 years. He pointed out to the Central Board of Direct Taxes (CBDT) instructions No.5051 of 1991 dtd. 7/2/1991 wherein, there is an instruction given to the prosecuting officers not to initiate prosecution against persons who had attained the age of seventy, at the time of commission of offence. The learned counsel for the petitioners submitted that the Honourable Supreme Court in Union of India vs. Arviva Industries Pvt. Ltd and others reported in (2014) 3 SCC 159 held that the circulars are binding on the Department; that the revenue cannot take a stand contrary to its own circulars; that in any case, the petitioners 2 and 3 cannot be said to be the principal officers of the company. There is no allegation in the impugned complaint to show that they were the persons in charge of and responsible to the company for the conduct of its business. The learned counsel relied upon the Judgment of this Court in W.P.No.34010 of 2014 dtd. 28/3/2018 (Mr.Kalanithi Maran vs. Union of India), wherein, this Court had held that where there is no material to show that the person prosecuted is the principal officer then, the persons cannot be asked to undergo the ordeal of trial. The learned counsel also pointed out the Judgment of the Hon'ble High Court of Delhi in Crl.R.P.No.36 of 2011 in Arunkumar Bhatia and another vs. Vijaykumar and others wherein, the Delhi High Court had quashed the prosecution since the accused persons were above the age of seventy years. Therefore, the learned counsel submitted that the petitioners 2 and 3 have to be exonerated and the impugned complaints insofar as the petitioners are concerned may be quashed.