August Cinema vs Income Tax Officer (Tds)
2024 Latest Caselaw 26539 Ker

Citation : 2024 Latest Caselaw 26539 Ker
Judgement Date : 5 September, 2024

Kerala High Court

August Cinema vs Income Tax Officer (Tds) on 5 September, 2024

Author: P.V.Kunhikrishnan

Bench: P.V.Kunhikrishnan

  CRL.MC. NO.359 OF 2015
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                                            2024:KER:68032

          IN THE HIGH COURT OF KERALA AT ERNAKULAM

                            PRESENT

      THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN

THURSDAY, THE 5TH DAY OF SEPTEMBER 2024 / 14TH BHADRA, 1946

                   CRL.MC NO. 359 OF 2015

    AGAINST THE ORDER/JUDGMENT DATED IN CC NO.637 OF

  2014 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (E&O),

                           ERNAKULAM

  PETITIONERS:

      1     AUGUST CINEMA(INDIA) PVT. LTD.
            RAJ SADAN, TC 26/322 - 5, NEAR ACV,
            SECRETARIAT WARD, STATUE,
            THIRUVANANTHAPURAM - 695 013, REPRESENTED
            BY ITS PRINCIPAL OFFICER, MANAGING
            DIRECTOR MR.SHAJI NADESAN.

      2     MR.SAJI NADESAN
            SRR HOUSE, PERUNGUZHI, AZHOOR,
            THIRUVANANTHAPURAM - 695 305, MANAGING
            DIRECTOR, AUGUST CINEMA (INDIA) PVT. LTD,
            THIRUVANANTHAPURAM.

      3     MR.PRITHVIRAJ SUKUMARAN
            TC 6/2262(7), PRARTHANA, CITY PARK
            COMPOUND, VATTIYOORKKAVU,
            THIRUVANANTHAPURAM - 695 013, DIRECTOR,
            AUGUST CINEMA (INDIA) PVT. LTD,
            THIRUVANANTHAPURAM.
 CRL.MC. NO.359 OF 2015
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    4     MR.SANTHOSH SIVAN
          C-25/102, NEW AKASH GANGA CO-OP SOCIETY,
          YAMUNA NAGAR, OSHIWARA, ANDHERI (W),
          MUMBAI - 400 053, DIRECTOR, AUGUST CINEMA
          (INDIA) PVT. LTD, THIRUVANANTHAPURAM.


          BY ADV SRI.C.UNNIKRISHNAN (KOLLAM)


RESPONDENTS:

    1     INCOME TAX OFFICER (TDS)
          3RD FLOOR, AAYAKAR BHAVAN, KOWDIAR,
          THIRUVANANTHAPURAM - 693 003.

    2     UNION OF INDIA
          REPRESENTED BY ITS ASST. SOLICITOR
          GENERAL, HIGH COURT OF KERALA.

    3     STATE OF KERALA
          REPRESENTED BY THE PUBLIC PROSECUTOR,
          HIGH COURT OF KERALA, ERNAKULAM.


          BY ADVS.
          SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)
          SRI.JOSE JOSEPH, SC, FOR INCOME TAX
          SRI.RENJITH.T.R, SR.PP
          SRI.V.GANESAN




        THIS CRIMINAL MISC. CASE HAVING COME UP FOR
ADMISSION ON 05.09.2024, THE COURT ON THE SAME DAY
PASSED THE FOLLOWING:
 CRL.MC. NO.359 OF 2015
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                    P.V.KUNHIKRISHNAN, J.
            ------------------------------------
              Crl.M.C. No.359 of 2015
           --------------------------------------
     Dated this the 05th day of September, 2024



                          ORDER

The petitioners are accused Nos.1 to 4 in CC

No.637/2014 on the file of Additional Chief Judicial

Magistrate Court (Economic Offences) Ernakulam.

It is a complaint filed against the petitioners by the

Income Tax Officer (TDS), alleging offence under

Section 276B of the Income Tax Act.

2. The allegation in the complaint in brief is

that, when an inspection was conducted on

03.02.2012 in the premises of the accused, it was

found that the accused was making various

payments during 2010-11 which were liable to tax

deduction at source such as fees of artists and

other contracts, professional and other consultancy CRL.MC. NO.359 OF 2015

2024:KER:68032

charges, rents etc., without deducting tax and

thereby not paying Rs.11,44,375/-. Hence, it is

alleged that the accused committed the offence.

According to the petitioners, even if the entire

allegations are accepted, no offence is made out.

3. Heard the learned counsel appearing for

the petitioners. Eventhough, this case was posted

for hearing on two occasions, there was no

representation for the 1st and 2nd respondents.

Therefore, this Court heard the learned Public

Prosecutor.

4. The offence alleged in this case is under

Section 276B of the Income Tax Act. It is submitted

by the petitioners that, during the financial year

2010-11, which at the beginning of the operations

of the petitioners Company, TDS were not deducted

from the payment and remuneration effected

during the 1st Cinema namely 'Urumi', produced by

the Company. According to the petitioners, this CRL.MC. NO.359 OF 2015

2024:KER:68032

happened due to ignorance. When it was pointed

out by the department, the entire amount of TDS

which was liable to be paid i.e. Rs.11,44,375/- along

with its penal interest were paid on 14.03.2012,

28.03.2012 and 29.03.2012, as evident by

Annexure-A3. Hence, it is alleged that there is no

necessity at all to initiate prosecution under Section

276B of the Income Tax Act. It is also contented

that, Section 276B is intended for non-payment of

already deducted amount of TDS alone. I think,

there is force in the above argument. Section 276B

of the Income Tax Act is extracted hereunder:

"S.276(B) - If a person fails to pay to the credit

of the Central Government,-

(a) the tax deducted at source by him as required

by or under the provision of Chapter XVII (B); or

(b) the tax payable by him as required by or under,

(i) sub sec (2) of Section 115 - O; or CRL.MC. NO.359 OF 2015

2024:KER:68032

(ii) the second proviso to Section 194 B,

He shall be punishable with rigorous imprisonment

for a term which shall not be less than 3 months

but which may extend to 7 years and with fine."

5. As per the above Section, if a person fails

to pay to the credit of the Central Government, the

tax deducted at source by him as required by or

under the provision of Chapter XVII(B) or the tax

payable by him as required or under sub Section (2)

of Section 115 - O or the second proviso to Section

194B, shall be punishable with imprisonment not

less than three months but which may extend to 7

years and with fine.

6. In this case, the allegation is that, the

petitioners never deducted tax at source. If that be

the case, I think, there is force in the argument of