Compounding Of Offences Allowed Under IT Act, HC's Inherent Jurisdiction U/S 482 CrPC Cannot Be Invoked For Quashing: Orissa HC
Kapil Dhyani
13 Jan 2025 4:45 AM
The Orissa High Court has refused to entertain a petition filed for quashing the offence under Sections 276(B) of the Income Tax Act, 1961, stating that the Petitioner-accused should have sought compounding of the offence. Justice Sibo Sankar Mishra observed, “In the present regime, where the compounding of the offence is permissible, the jurisdiction of this Court under...
The Orissa High Court has refused to entertain a petition filed for quashing the offence under Sections 276(B) of the Income Tax Act, 1961, stating that the Petitioner-accused should have sought compounding of the offence.
Justice Sibo Sankar Mishra observed,
“In the present regime, where the compounding of the offence is permissible, the jurisdiction of this Court under Section 482 Cr.P.C. may not be necessarily invoked by the petitioner. In that view of the matter, the petitioner may resort to the procedural remedy under Section 320 Cr.P.C. by relying upon the Circular dated 17.10.2024 and seek for compounding of the offences complained off against him by the Revenue.”
The bench was referring to the Circular issued by the Central Board of Direct Taxes, providing guidelines for compounding of offences under the Income Tax Act.
The Petitioner was accused of failing to deposit the TDS amount into the Central Government account by the stipulated dues dates, despite deducting the same from the salaries of its employees.
As per Income Tax Rules, the amount should have been deposited to the credit of Central Government Account by 7th of next month. However, the said amount was alleged to be deposited with a delay of more than 12 months.
The trial court had taken cognizance of the complaint and also rejected his petition seeking discharge.
Petitioner contended that he had deposited the entire TDS amount deducted, along with the delayed interest.
The Revenue however contested the quashing petition, stating that the High Court's inherent jurisdiction under Section 482 CrPC is forbidden in view of the CBDT Circular.
A perusal of the Circular, the High Court stated, “makes it abundantly clear that the department has harmonized the entire procedure for compounding all kinds of offences under the I.T. Act arising out of curable defects. Clauses 4.6 and 8.3 as reproduced above clearly deals with the offences for which the petitioner is sought to be prosecuted.”
Accordingly, it disposed of the petition with liberty to the Petitioner to approach the trial Court for compounding.
Appearance: Mr. Milan Kanungo, Senior Advocate along with Mr. S. K. Dwivedy, Advocate for Petitioner; Mr. Abinash Kedia, Junior Standing Counsel (Income Tax)
Case title: Binod Pattanayak v. Union of India
Case no.: CRLMC No.3284 of 2023