Kerala High Court
Mithra Agricultural Producer vs Assistant Commissioner on 2 August, 2024
Author: P. V. Kunhikrishnan
Bench: P.V.Kunhikrishnan
2024:KER:59676
Crl.M.C.No.1352 and 1361 of 2016
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN
FRIDAY, THE 2ND DAY OF AUGUST 2024 / 11TH SRAVANA, 1946
CRL.MC NO. 1352 OF 2016
AGAINST THE ORDER IN CC NO.437 OF 2015 OF ADDITIONAL CHIEF
JUDICIAL MAGISTRATE (E&O),ERNAKULAM
PETITIONERS/ACCUSED 1 & 2:
1 MITHRA AGRICULTURAL PRODUCER
AKSHARA MANDIRAM, 3RD FLOOR, MARINE
DRIVE,ERNAKULAM, KOCHI - 682 011 REPRESENTED BY
ITSCHAIRMAN, ANSON K.MALIAKKAL.
2 ANSON K.MALIAKAL, AGED 51 YEARS
S/O.M.U.KUNJAVARA, CHAIRMAN, MITHRA
AGRICULTURALPRODUCER COMPANY LTD.,
AKSHARA MANDIRAM,3RD FLOOR, MARINE DRIVE,
ERNAKULAM, KOCHI -682 011.
BY ADVS.
SRI.M.PAUL VARGHESE
SRI.T.KOSHY
RESPONDENT/COMPLAINANT:
ASSISTANT COMMISSIONER
OFFICE OF THE JOINT COMMISSIONER OF INCOME
TAX(TDA) C.R.BUILDING, I.S.PRESS ROAD,
KOCHI -682 018.
BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
02.08.2024 ALONG WITH CRL.M.C.1361/2016, THE COURT ON THE
SAME DAY PASSED THE FOLLOWING:
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Crl.M.C.No.1352 and 1361 of 2016
2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN
FRIDAY, THE 2ND DAY OF AUGUST 2024 / 11TH SRAVANA, 1946
CRL.MC NO. 1361 OF 2016
AGAINST THE ORDER IN CC NO.435 OF 2015 OF ADDITIONAL CHIEF
JUDICIAL MAGISTRATE (E&O),ERNAKULAM
PETITIONERS/ACCUSED 1 & 2:
1 MITHRA AGRICULTURAL PRODUCER COMPANY LTD.
AKSHARA MANDIRAM, 3RD FLOOR, MARINE
DRIVE,ERNAKULAM, KOCHI - 682 011
REPRESENTED BY ITS CHAIRMAN, ANSON K.MALIAKKAL.
2 ANSON K.MALIAKAL, AGED 51 YEARS
S/O.M.U.KUNJAVARA, CHAIRMAN, MITHRA
AGRICULTURALPRODUCER COMPANY LTD.,
AKSHARA MANDIRAM, 3RD FLOOR,MARINE DRIVE,
ERNAKULAM, KOCHI - 682 011.
BY ADVS.
SRI.M.PAUL VARGHESE
SRI.T.KOSHY
RESPONDENT/COMPLAINANT:
ASSISTANT COMMISSIONER OF INCOME TAX (TDS)
OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX
(TDS), C. R. BUILDING, I. S. PRESS ROAD,
KOCHI - 682 018.
BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
02.08.2024 ALONG WITH CRL.M.C.1352/2016, THE COURT ON THE
SAME DAY PASSED THE FOLLOWING:
2024:KER:59676
Crl.M.C.No.1352 and 1361 of 2016
3
P. V. KUNHIKRISHNAN, J.
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Crl.M.C. Nos.1352 and 1361 of 2016
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Dated this the 2nd day of August, 2024
ORDER
These Criminal Miscellaneous Cases are connected and
therefore I am disposing of these two cases by a common order.
2. These Criminal Miscellaneous Cases are filed
to quash the proceedings against the petitioners in
C.C.Nos.435/2015 & 437/2015 on the file of the Additional Chief
Judicial Magistrate Court (Economic Offences), Ernakulam. The
petitioners in both these cases are one and the same. Petitioners
are challenging the prosecution initiated by the respondent
Assistant Commissioner of Income Tax. In
Crl.M.C.No.1361/2016, Annexure A6 is the complaint which is
sought to be quashed and in Crl.M.C.No.1352/2016, Annexure
A2 is the complaint sought to be quashed.
3. I will narrate the facts in
Crl.M.C.No.1361/2016 first:
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Crl.M.C.No.1352 and 1361 of 2016
The 1st petitioner is an Agricultural Producer Company formed by
the farmers, Self Help Groups and Co-operative Societies. The
2nd petitioner is its Chairman. Due to financial difficulties,
during the period 2009-2010 and 2010-2011, the 1 st petitioner
company could not promptly pay the rent, make the payment to
the contractors and professional charges, is the submission. It is
submitted that there were delay in payment. According to the
petitioners, neither the rent, professional charges, contractors
payments etc., were made promptly nor the tax collected during
the said period. In 2012, an Officer of the respondent conducted
an inspection in the 1st petitioner company and demanded TDS
for the undeducted amount. The contention of the respondent
Income Tax Officer was that, since the company made the book
entries, TDS is to be remitted. The 1st petitioner company did not
dispute the said contention to avoid further complication is the
submission. It is the case of the petitioners that the company
took loans from the members and remitted the entire demanded
amount as TDS. Annexure-A1 is the receipt of payment.
According to the petitioners, though the entire amount was
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Crl.M.C.No.1352 and 1361 of 2016
remitted within time, the respondent initiated steps for charging
penalty. The respondent issued Annexure-A2 notice under
Section 271(c) of the Income Tax Act. Against those proceedings,
the petitioners preferred an appeal which was dismissed and
against that dismissal order, an appeal was filed before the
Tribunal as Income Tax Appeal Nos.212 to 214/COCH/2015 for
the assessment years 2010-11, 2011-12 and 2012-13.
4. During the pendency of appeal, the
Commissioner of Income Tax issued show cause notice under
276 of the Income Tax Act as evident by Annexure-A3. The
petitioner submitted Annexure-A4 reply. According to the
petitioners, even though the 1st petitioner submitted about the
financial difficulties faced by the company and requested to drop
the prosecution proceedings, it was not taken into consideration.
It is submitted that the Commissioner of Income Tax (TDS)
issued a proceeding and accorded sanction to file complaint
under Section 276B as evident by Annexure-A5. Accordingly,
Annexure-A6 complaint was filed before the Additional Chief
Judicial Magistrate (Economic Offences), Ernakulam. The main
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Crl.M.C.No.1352 and 1361 of 2016
allegations in Annexure-A6 complaint are as follows:
'6. Details of tax deducted but not credited to the
Government Account beyond a period of 12 months
are available in the Income Tax Departmental
Applications Computer Network System in the Tax
Deducted Menu (Enforcement menu). The defaults
committed by the accused for non remittance of tax
deducted at source as well as for the delayed
remittance from the payments made towards
contract, Lease Rent, professional charges are
quantified at Rs. 14,07,487/- (Rupees Fourteen
Lakhs Seven Thousand Four Hundred and Eighty
Seven only) for the Financial Year 2009-10.
7. A show cause notice for initiation of Prosecution
Proceedings under Section 276B of Income Tax Act,
1961 dated 03.12.2012 was issued to the accused. The
accused vide its reply admitted the delay in
remittance of tax deducted to the credit to the Central
Government along with other explanations.'
5. According to the petitioners, the company paid
TDS as per Annexure-AI. Annexure-A8 is produced to show the
statement to prove the payment. It is also submitted that the
business of the petitioner company was that the building owners
adjusted the rent from the security advance because the
petitioner company was not in a position to pay the rent. So the
arrears of rent were adjusted from the security amount.
According to the petitioners, respondent charged TDS for that
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Crl.M.C.No.1352 and 1361 of 2016
amount also. Annexure-A9 is produced to prove the same.
Annexures-A10 and A11 are the balance sheet for the period
2009-2010, 2010-2011. Annexure-A12 is produced to show the
statement of the actual date of payment of TDS remitted during
the year 2009-2010. Annexure-A13 is produced along with the
complaint. According to the petitioners, Annexure-A13 is
produced by the respondent based on wrong details and it do not
disclose the factual position. The Chief Executive Officer of the
petitioner company Mr.Ambujakshan Pillai, who was the
Principal Officer respectively for TDS payment was suffering
from serious illness and Annexures-A14 and A15 were produced.
He was the Principal Officer responsible for TDS payment. It is
also submitted that the averment in the complaint that the
petitioners failed to pay credit of the Central Government tax
collected is not correct and to prove the same, Annexure-A16 is
produced. During the pendency of the appeal against the penalty
proceedings, the petitioners filed W.P(C).No.10887/2015
challenging the penalty and this Court directed to consider the stay
petition filed by the petitioners and ordered to keep in abeyance
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Exts.P8 and P10 notices of prosecution. Annexure-A17 is the
order passed by this Court. The appellate authority Income Tax
Appellate Tribunal granted stay on condition that the petitioner
shall remit 10% of the demand outstanding. Annexure-A18 is the
stay order. Annexure-A19 is the receipt for the remittance of the
amount. When the prosecution steps based on Exts.P8 and P10
produced in W.P(C).No.10887/2015, this Court delivered
Annexure-A17 judgment. It is the case of the petitioners that
Annexure-A6 prosecution is initiated when the order passed by
this Court in Annexure-A17 was in force. It is also submitted
that, ultimately, the appeal filed by the petitioners were allowed
by the Income Tax Appellate Authority on 26.09.2017. Hence,
the prosecution against the petitioners is to be set aside.
6. Similar is the contention in Crl.M.C.No.1352/2016.
In that case, Annexure-A2 is the complaint.
7. Heard learned counsel for the petitioners and the
Standing Counsel appearing for the respondent.
8. This Court considered the contention of the
petitioners and the respondent. Annexure-A17 is the judgment
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Crl.M.C.No.1352 and 1361 of 2016
delivered by this Court on 07.04.2015 in W.P(C).No.10887/2015.
This Court in Anne xure-A17 clearly stated that, all further steps
pursuant to Exts.P8 and P10 notices in that Writ Petition shall be
kept in abeyance till the 5 th respondent passes orders, as directed
above. Exts.P8 and P10 produced in that Writ Petition are the
prosecution notices issued by the respondent. Annexure-A6
complaint was filed before the Court on 30.11.2015. Therefore, it
is clear that there is an interdiction from this Court as evident by
Annexure-A17 judgment against initiating prosecuton. For that
reason itself, the complaint in this case is to be quashed.
Moreover, now the Income Tax Appeal Nos.212 to
214/COCH/2015 is already allowed by the Income Tax Appellate
Tribunal, in which, it is stated that the Assessing Officer was
directed to re-decide the issue whether the assessee was
prevented by reasonable cause in depositing the tax deducted at
source after giving proper and sufficient opportunity to the
assessee afresh in accordance with law keeping in view that it is
not a case that the assessee has not made the absolute default by
not remitting the recovered tax. It is also observed that, this is a
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case where the assessee has duly deposited the tax deducted at
source but not within the time as permissible under the Income
Tax Act. In the light of the subsequent events, I am of the
considered opinion that the prosecution against the petitioners
in these two cases need not be continued.
Therefore, these Criminal Miscellaneous Cases are
allowed in the following manner:
I. Crl.M.C.No.1361/2016 is allowed. Annexure-A6
complaint pending before the Additional Chief
Judicial Magistrate (Economic Offences) Ernakulam
as C.C.No.435/2015 is quashed.
II. Crl.M.C.No.1352/2016 is allowed. Annexure-A2
complaint pending before the Additional Chief
Judicial Magistrate (Economic Offences),
Ernakulam as C.C.No.437/2015 is quashed.
Sd/-
P. V. KUNHIKRISHNAN
JUDGE
DM/Sbna-05.08.2024
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Crl.M.C.No.1352 and 1361 of 2016
PETITIONER ANNEXURES
Annexure A6 TRUE COPY OF THE ORDER OF THE INCOME TAX
APPELLATE TRIBUNAL, COCHIN BENCH DATED
26.09.2017
ANNEXURE-A1: TRUE PHOTOCOPY OF PROCEEDINGS DATED
17.3.2015 UNDER SEC.276 B OF THE INCOME
TAX ACT.
ANNEXURE-A2: TRUE CERTIFIED COPY OF THE COMPLAINT IN
ANNEXURE-A3: TRUE COPY OF THE SUMMONS DATED
21.12.2015 TO THE 2ND PETITIONER
ANNEXURE-A4: TRUE COPY OF THE STATEMENT SHOWING THE
ACTUAL DATE OF PAYMENT OF TDS REMITTED
DURING THE YEAR 2010-2011
ANNEXURE-A5: TRUE COPY OF THE STATEMENT SHOWING THE
PAYABLE AMOUNT IN THE BALANCE SHEET OF
2009-2010.
ANNEXURE A7 TRUE COPY OF THE PAYMENT FORM 4 DATED
05.04.2021 DURING THE PERIOD FY 2010-2011
ANNEXURE A8 TRUE COPY OF ORDER OF FULL AND FINAL
SETTLEMENT OF TAX ARREARS OF THE CIT
(TDS) KOCHI DATED 30.04.2021
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Crl.M.C.No.1352 and 1361 of 2016
PETITIONER ANNEXURES
ANNEXURE-A1: TRUE PHOTOCOPY OF THE RECEIPTS OF PAYMENTS
OF TDS DATED 7.8.2012
ANNEXURE-A2: TRUE COPY OF THE NOTICE DATED 27.8.2012
UNDER SEC.271(C) OF THE INCOME TAX ACT.
ANNEXURE-A3: TRUE COPY OF THE SHOW CAUSE NOTICE DATED
4.3.2013 UNDER SEC.276 OF INCOME TAX ACT.
ANNEXURE-A5: TRUE PHOTOCOPY OF PROCEEDINGS DATED
17.3.2015 UNDER SEC.276 B OF THE INCOME TAX ACT.
ANNEXURE-A6: TRUE CERTIFIED COPY OF THE COMPLAINT IN CC
ANNEXURE-A7: TRUE COPY OF THE SUMMONS DATED 21.12.2015 TO
THE 2ND PETITIONER
ANNEXURE-A8: TRUE COPY OF THE STATEMENT SHOWING THE
AMOUNTS PAYABLE AND WHICH WERE NOT MADE ACTUALLY, BUT FOR
WHICH TDS IS REMITTED
ANNEXURE-A9: TRUE COPY OF THE STATEMENT SHOWING THE RENT
ADJUSTMENT
ANNEXURE-A10: TRUE COPY OF THE BALANCE SHEET SHOWING THE
PROFIT AND LOSS ACCOUNT OF THE IST PETITIONER COMPANY FOR
THE PERIOD 2009-2010
ANNEXURE-A4: TRUE PHOTOCOPY OF THE REPLY DATED 6.3.2013
ANNEXURE-A12: TRUE COPY OF THE STATEMENT SHOWING THE
ACTUAL DATE OF PAYMENT OF TDS REMITTED DURING THE YEAR
2009-2010
ANNEXURE-A13: TRUE COPY OF THE ANNEXURE PRODUCED BY THE
RESPONDENT IN THE COMPLAINT CC 435/2015
ANNEXURE-A14: TRUE COPY OF THE MEDICAL CERTIFICATE DATED
7.10.11 EVIDENCING THE ILLNESS OF AMBUJAKSHAN PILLAI
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ANNEXURE-A15: TRUE COPY OF THE MEDICAL CERTIFICATE DATED
3.1.2013 EVIDENCING THE ILLNESS OF AMBUJAKSHAN PILLAI
ANNEXURE-A16: TRUE COPY OF THE STATEMENT SHOWING THE
PAYABLE AMOUNT IN THE BALANCE SHEET OF 2009-2010
ANNEXURE-A17: TRUE COPY OF ORDER IN WPC 10887/2015 DATED
7.4.2015
ANNEXURE-A18: TRUE COPY OF STAY ORDER DATED 15.5.2015
ANNEXURE-A19: TRUE COPY OF THE RECEIPTS FOR THE
REMITTANCE OF THE AMOUNT IN COMPLIANCE WITH ANNX A18
ANNEXURE-A11: TRUE COPY OF THE BALANCE SHEET SHOWING THE
PROFIT AND LOSS ACCOUNT OF THE IST PETITIONER COMPANY FOR
THE PERIOD 2010-2011
ANNEXURE-A20: TRUE COPY OF THE ORDER OF INCOME TAX
APPELLATE TRIBUNAL, COCHIN BENCH DATED 26.09.2017
ANNEXURE-A21: TRUE COPY OF THE PAYMENT FORM - 4 DATED
05.04.2021 DURING THE PERIOD FY 2009-2010
ANNEXURE-A22: TRUE COPY OF ORDER OF FULL AND FINAL
SETTLEMENT OF TAX ARREARS OF THE CIT (TDS) KOCHI DATED
30.04.2021
