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Delay in TDS deposit lands bizman in jail

July 11, 2019 06:15 AM


Delay in TDS deposit lands bizman in jail


More than a year’s delay in depositing tax deducted at source (TDS) landed a Mumbai businessman with a prison sentence of three months. A local court has held a company and its director, Omprakash Goenka, guilty of delayed deposit to the Central government repository of around Rs 55 lakh collected as TDS and sentenced him to three months’ rigorous imprisonment. Additional chief metropolitan magistrate at Ballard Pier, Mumbai, I R Shaikh, also imposed a fine of Rs 5,000 on Goenka, a senior citizen, for the offence under the Income Tax Act.

“It is clear that the deposit of TDS with delay does not absolve criminal liability,” said the court in its order holding the company and Goenka responsible to pay the tax on time, which they had failed to without a reasonable excuse.

In 2014, the income tax department had filed a complaint against Twinkle Envirotech and Goenka for breach of Section 276B of I-T Act. The amounts collected have to be deposited by the seventh day of the coming month.

Amit Munde, I-T special public prosecutor, informed the magistrate that Goenka “was a habitual offender” and has three other similar cases pending against him for not depositing TDS on time to Central government. Munde informed the court that Goenka was lodged in Nashik central jail in connection with another criminal case. He was produced from Nashik prison on July 8 when his conviction and sentence was pronounced at Ballard Pier court. Goenka’s defence counsel G A Tambe sought leniency saying there was “no tax evasion’’ and on grounds of his age and health. S C Meena, assistant commissioner, I-T, had filed the complaint for financial year 2008-09 and assessment year 2009-10.

Munde argued that almost Rs 55 lakh was deducted as TDS but the accused failed to deposit it for over 12 months without reasonable excuse. The I-T department issued a showcause notice first and said the explanation did not constitute a reasonable excuse.

Goenka’s advocate G A Tambe denied any wrongdoing by his client. He also questioned the validity of prosecution sanction order. He argued that Goenka’s reply and explanation that a technical glitch in the company’s software caused the delay, was not considered. He further said the I-T complaint suppressed the fact that he had filed a reply. Munde argued a software glitch is no excuse as any other computer could have been used.

The court held there was a delay of over 12 months in depositing the TDS, though Goenka did pay it with interest and penalty. “The defence failed to prove reasonable cause for the failure,’’ the court said.


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