Mumbai court upholds fine and jail for late filing of TDS | Bombay News

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MUMBAI: A municipal court dismissed the appeals and upheld four convictions for not filing the TDS amount within the allotted time; a decision which, according to the income tax department attorney, is rare in Mumbai legal circles for such an offense.
Ichibaan Automobiles Pvt Ltd and GMS Motors Pvt Ltd, as well as the directors of GMS GM Singh and Parveen Nindrajog, had filed a criminal appeal in July 2019 against an order of a metropolitan magistrate condemning them for failure to pay the tax withheld from the source on time.

A fine of 5,000 rupees each was imposed on the companies and Nindrajog, while 3 months of IR was awarded to Singh, director of both companies.
TDS: Cos, administrators cite financial problems for late payment
The companies and directors, through their attorneys Sujay Kantawalla and Ashish Chavan, argued that they had deducted a tax of Rs 7.5 lakh in March 2010 in the case of Ichibaan and Rs 42 lakh in the cases of GMS, but were prosecuted for not having filed it. within the legal deadline. They argued that the charges against them were “vague” and that no admissible evidence had been produced.
They said that the sanction of prosecution was granted without any solicitude by the IT commissioner while their plea to settle the dues was pending. They later paid the TDS with interest voluntarily and the default was involuntary and due to financial hardship, they argued, adding that it was “reasonable cause” without loss to the government.
The district court, however, held that even if a financial crisis is suspected, it does not make any difference for the payment of the taxes deducted and therefore the reason is not sufficient.
“The entire TDS with interest was paid before the notice of presentation was issued. The sanction order did not even record the explanation of our board, ”they argued. The two directors are 70 years old and in “poor health,” Kantwalla told the court.
But special prosecutor Amit Munde, for the IT department, said the IT law clearly requires that the TDS be deposited in the treasury by the 7th of next month and that the accused cannot plead ignorance of it. the law. Munde also said that simply filing a dispute resolution request or dues does not exonerate anyone from liability and does not prevent the department from taking legal action.
On December 16, courtroom judge Chitra Hankare ruled that the magistrate was right to convict them. She said the IT department separately presented a demonstration to the company and its manager, and also found the charge to be free of misleading errors. The court also concluded that the prosecution’s sanction was valid and declared “that it is not necessary for every fact to be mentioned in detail in the sanction”. The court ruled: “In the sanction order, it is clearly stated that the accused failed to deposit the amount without reasonable cause and that the sanctioning authority looked into the excuse given by the accused for not filing it. ”
The Sessions Tribunal said: “Even if it is presumed that the TDS was credited to the government at a late stage, it is necessary to see whether it will release the accused from criminal liability. In its order against Singh, the court noted that the IT department’s prosecutor argued that the accused was “a repeat offender and that there were 70 to 72 defaults and other cases pending against him.” “Confirmation of conviction for TDS default is rare and historic in Mumbai,” Munde said. The court also dismissed the request to stay the judgment and ordered the issuance of a bail warrant against the two defendants because they were not present.


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