Kashvi International Pvt. Ltd. & another Vs Union of India (Orissa High Court)
In the case of Kashvi International Pvt. Ltd. v. Union of India, the Orissa High Court quashed prosecution proceedings initiated against the petitioners for delay in depositing TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) amounts. The petitioners had collected these taxes for the financial year 2021-2022 but failed to deposit them within the prescribed timeline, resulting in the initiation of criminal proceedings under Sections 276B and 276BB of the Income Tax Act. The delay ranged from 1 to 84 days, and the authorities had filed a complaint, arguing that the late deposit amounted to an offence.
The petitioners explained that the delay was due to a series of financial and operational challenges, exacerbated by the COVID-19 pandemic. They highlighted the adverse economic conditions, including the impact of restrictions on their business and cash flow issues caused by the state government’s decision to withdraw installment payments for a mining lease. The petitioners argued that the delay was a result of reasonable causes beyond their control. The Orissa High Court, after reviewing similar precedents, concluded that the COVID-19 pandemic and the financial difficulties stemming from it provided a reasonable explanation for the delay. In light of these circumstances, the court exercised its inherent jurisdiction and quashed the prosecution proceedings.
