Case Law Details
Absolute Homes Pvt. Ltd. Vs ITO (Madras High Court)
In the case of Absolute Homes Pvt. Ltd. Vs ITO, the petitioner challenged a communication dated January 5, 2024, which initiated prosecution under Sections 276B/276BB of the Income Tax Act for the late remittance of Tax Deducted at Source (TDS). The petitioner acknowledged that TDS had not been remitted on time but asserted that the amounts were subsequently paid along with penalties and interest. Despite submitting responses to earlier notices, the petitioner claimed the authorities failed to consider these replies before issuing the new notice.
The respondent’s counsel contended that the notice was merely a show cause, and the department would review the petitioner’s replies before making any decision regarding prosecution. The petitioner argued that the new notice was barred by limitation, given that the TDS issue dated back to the fiscal year 2012-13, and no show cause notice had been received prior to January 2024. Despite the petitioner’s compliance, the Madras High Court found no grounds to interfere with the prosecution process, stating that it was the respondent’s responsibility to evaluate the replies and decide on further action. Consequently, the writ petition was dismissed, affirming the authority’s discretion in the matter.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
By consent, the Writ Petition is taken up for final disposal.
2. The challenge in this Writ Petition is to the Communication Reference No.R2 dated 05.01.2024, issued by the respondent in petitioner’s case for TAN : CHEA12977G and to quash the same, and consequently, to forbear the respondent from prosecuting the petitioner under Section 276 B/276BB of the Income Tax Act, 1961, for belated remittance of Tax Deducted at Source (TDS)
3. Mr. Suhrith Parthasarathy, learned counsel appearing for the petitioner would submit that because of the failure on the part of the petitioner to remit TDS in time, though the same has been remitted by the petitioner along with penalty and interest subsequently, the petitioner has been issued with a show cause notice calling for reply, as to why, prosecution cannot be initiated against them for not remitting the TDS in accordance with law; that though the petitioner has filed replies dated 06.10.2023 and 27.10.2023, stating the above details, the respondent, without considering those replies, went on to re-issue the same notice. Therefore, the learned counsel prayed for setting aside the impugned order. and sought for appropriate consequential direction.
4. Per contra, Dr. B. Ramasamy, learned Senior Standing Counsel, who takes notice on behalf of the respondent would submit that it is only a show cause notice, since it is stated by the learned counsel for the petitioner that replies were filed to the show cause notice, based on the such replies, appropriate orders would be passed, therefore, he prayed for dismissal of the Writ Petition.
5. Heard Mr. Suhrith Parthasarathy, learned counsel appearing for the petitioner and Dr. B. Ramasamy, learned Senior Standing Counsel on behalf of the respondent and perused the materials available on record.
6. Initially, a show cause notice was issued on 17.02.2015 to the petitioner; though, according to the petitioner, no such show cause notice was served on the petitioner and it is for the first time, the petitioner has been issued with the show cause notice dated 05.01.2024, and challenging the same, the petitioner is before this Court by way of present Writ Petition on the ground that the same is barred by limitation, since the issue of payment of TDS pertains to the FY 2012-13 and after a lapse of 12 years, the present Show Cause Notice was issued; that it is not the case of the respondent that the petitioner has not at all paid TDS, since TDS was already deposited by the petitioner along with interest and penalty, but, with a delay, therefore, no prosecution can be launched; that setting out such averments, the petitioner has filed detailed replies, however, without considering those replies, the present impugned order came to be passed, considering the fact that the petitioner has filed detailed reply to the show cause notice, it is for the respondent-Department to consider such reply and take appropriate decision in the matter, as to whether they can initiate prosecution or drop the same based on the replies filed by the petitioner, this Court is not inclined to interfere with any of the decision to launch any prosecution by the respondent against the petitioner.
7. Accordingly, the Writ Petition fails and it is dismissed. No costs. Consequently, connected Miscellaneous Petitions are closed.
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