Jharkhand High Court
M/S Sks Mc Joint Venture Having Its ... vs The State Of Jharkhand on 8 May, 2025
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
[2025:JHHC:13952]
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 1079 of 2025
1.
M/s SKS MC Joint Venture having its office at Ashok Kunj,
Opposite Road No.3, P.O: Doranda, P.S: Argora, Ashok
Nagar, District: Ranchi-834001 through its authorised
signatory Sri Santosh Kumar Singh aged about 64 years,
son of Shri Awadhesh Prasad Singh resident of Ashok
Kunj, Opposite Road No.3, P.O Doranda, P.S.Argora,
Ashok Nagar, District: Ranchi-834001
2. Sri Santosh Kumar Singh aged about 60 years, son of Shri
Awadhesh Prasad Singh resident of Ashok Kunj, Opposite
Road No.3, P.O: Doranda, P.S:Argora, Ashok Nagar,
District: Ranchi-834001
...... Petitioners
Versus
1. The State of Jharkhand
2. Union of India Income Tax Department through Sri Sunil
Kisan Agawane (Deputy Commissioner Income Tax, ) TDS
Circle, 3rd Floor, Central Revenue Building (Annexe),
Main Road, Ranchi-834001, P.O.- GPO, P.S.- Kotwali,
District-Ranchi-834001
..... Opposite Parties
For the Petitioners : Mr. Gaurang Jajodia, Adv.
For the State : Mr. Abhay Kr. Tiwari, Addl. PP
For the opp. party no. 2 : Mr. Kumar Vaibhaw , Adv.
PRESENT
HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
By the Court:- Heard the parties.
2. This Criminal Miscellaneous Petition has been filed
invoking the jurisdiction of this Court under Section 528 of
the Bharatiya Nagarik Suraksha Sanhita, 2023 with a prayer
to quash and set aside the order dated 26.03.2021 passed by
the learned Special Judge, Economic Offences, Ranchi in
Economic Offence Case No. 43 of 2019 whereby and where
under the learned Special Judge has taken cognizance of the
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offence punishable under Section 276B read with Section
278B of the Income Tax Act, 1961 against the petitioners.
3. The brief fact of the case is that the petitioner No.2 being
the partner and the person responsible for the acts of the
petitioner No.1- partnership firm, has failed to pay to the
credit of the Central Government, the T.D.S. amount
deducted by him, to the tune of Rs. 25,27,355/- by the end of
the month; after deducting such tax at source, i.e. by
30.04.2016.
4. Learned counsel for the petitioners submits that the
undisputed fact remains that the petitioners have deposited
the deducted T.D.S. from the payment made with interest
thereon till the date of such deposit on 22.06.2016 but after
receipt of such payment with interest, instead of
compounding the offences, which is compoundable under
Section 279 (2) of the Income Tax Act, 1961, just to harass the
petitioners knowing pretty well the facts of this case, this
prosecution has been instituted. Learned counsel for the
petitioners relies upon the judgment passed by a co-ordinate
Bench of this Court in the case of M/s Dev Multicom Private
Ltd. vs. The State of Jharkhand & Another in Cr.M.P.
No.2941 of 2018 and other allied cases dated 28.02.2022;
wherein the co-ordinate Bench of this Court relied upon the
judgment of the Hon'ble Patna High Court in the case of
Sonali Autos (P) Ltd. vs. State of Bihar passed in Criminal
Miscellaneous No.16498 of 2014 dated 02.08.2017 and inter
alia considering the fact that the prosecution was instituted
after receipt of the deducted T.D.S. amount with requisite
interest; it was observed that such a prosecution is not in
accordance with law. Hence, it is submitted that the prayer
as prayed for by the petitioners, in the instant Cr.M.P., be
allowed.
5. Learned Addl.P.P. appearing for the State and the learned
counsel for the opposite party No.2 oppose the prayer of the
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petitioners made in the instant Cr.M.P. but learned counsel
for the opposite party No.2 fairly submits that the petitioners
have deposited the said deducted T.D.S. amount of Rs.
25,27,355/- with stipulated interest thereon, on 22.06.2016
after a delay of less than five months from the due date of the
deposit. It is also fairly submitted by the learned counsel for
the opposite party No.2 that after deposit of the said amount,
this case being Economic Offence Case No. 43 of 2019 has
been instituted on 13.04.2018. Though, it is fairly submitted
by the learned counsel for the opposite party No.2 that the
Principal Chief Commissioner or Chief Commissioner or
Principal Director General or a Director General of Income
Tax Act has been vested with the power of compounding
any offence either before or after the institution of the
proceedings but since a format is prescribed in Form No.1
under the Central Board of Direct Taxes (C.B.D.T) guidelines;
which prescribes a format for the application to be made by
the applicant desirous of compounding of any offence,
hence, the petitioners having not made any application for
composition of the offence, therefore, the complaint has been
instituted. Hence, it is submitted that this Cr.M.P., being
without any merit, be dismissed.
6. Having heard the rival submissions made at the Bar and
after carefully going through the materials available in the
record, it is pertinent to mention here that Section 279 (2) of
the Income Tax Act, 1961 in no uncertain manner, vests the
power upon the Principal Chief Commissioner or Chief
Commissioner or a Principal Director General or a Director
General of Income Tax Act for compounding an offence
either before or after institution of the proceedings. A
conjoint reading of Section 276 B and 279 (2) of the Income
Tax Act, 1961, makes it crystal clear that the basic purpose of
introduction of such provision of law is to create a deterrence
against failure in deposit of the T.D.S. within the stipulated
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period. But it is obvious that, the very purpose of vesting the
power of compounding the offence upon the senior officers
of the Income Tax Department, as already indicated above in
this judgment, is that in case the defaulting person deposits
the amount before institution of the complaint, the offence is
required to be compounded; instead of instituting a
complaint and thereby harassing the person who has
deposited the amount with stipulated interest before filing of
the complaint and wasting the precious time of the court as
well as the officers concerned of the Income Tax Department.
7. The verbatim of Section 279 (2) of the Income Tax Act, 1961
makes it crystal clear that the Principal Chief Commissioner
or Chief Commissioner or Principal Director General or a
Director General of Income Tax Act may also suo motu
exercise their power of compounding the offence. The
instructions to the subordinate authorities in terms of Section
119 of the Income Tax Act, 1961 by the Central Board of
Direct Tax, is obviously for the purpose of proper
administration of the provisions of the Income Tax Act. A
form has been prescribed for an application to be made by
any person desiring for compounding of any offence but
even the instructions of the Central Board of Direct Taxes,
nowhere debars the Principal Chief Commissioner or Chief
Commissioner or Principal Director General or a Director
General of Income Tax Act to suo motu exercise the power of
composition of the offences more so when the amount has
been deposited with stipulated interest; before filing of the
complaint.
8. Under such circumstances, this Court is of the considered
view that since the complainant did not file the complaint
before deposit of the T.D.S. amount with interest by the
petitioners and also not even immediately after that; may be
with ignorance that such amount has been deposited; after a
period of more than three years of the deposit of the said
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defaulted amount with stipulated interest thereon, the
complaint case was filed, in such facts of the case, this Court
is of the considered view that the continuation of this
criminal proceeding against the petitioners will amount to
abuse of process of law. Therefore, this is a fit case where the
prayer of the petitioner, as prayed for by the petitioners, be
allowed.
9. Accordingly, the order dated 26.03.2021 passed by the
learned Special Judge, Economic Offences, Ranchi in
Economic Offence Case No. 43 of 2019 is quashed and set
aside against the petitioner.
10. Accordingly, this Criminal Miscellaneous Petition stands
allowed.
(Anil Kumar Choudhary, J.)
High Court of Jharkhand, Ranchi
Dated, the 8th May, 2025
Smita /AFR
