The Delhi High Court ruled that a delayed deposit of tax deducted at source (TDS) does not relieve a taxpayer or company officials from criminal liability u/s 276B of the Income Tax Act, 1961.
Therefore, Justice Amit Mahajan dismissed the petition submitted via a company’s Managing Director, asking to quash a criminal complaint and summoning order for the case of late deposit of TDS of more than Rs 2.09 crore for the FY 2017–18.
The appeal contested the complaint instituted by the Income Tax Department for offences under Sections 276B (Failure to pay TDS to the credit of the Central Government), 278B (offences committed by companies) and 278E (presumption of a culpable mental state) of the Income Tax Act.
Read Also: How to Easily Estimate Tax Penalty with TDS Software
The applicant said that there was a delay, but the TDS had been deposited.
Disagreeing, the High Court at the outset said that,
“Subsequent payment does not obliterate criminal liability unless the statute so provides. The assessee cannot be granted immunity from prosecution merely on the ground that ultimately TDS was deposited in Govt account, albeit belatedly.”
It stated that the explanation for financial difficulty or “reasonable cause,” which led to the late TDS filing, is a defence that can be contested in proceedings u/s 528 BNSS.
The applicant had asked to claim that another director was only obligated for compliance with the TDS deposit.
Also Read: TDS Online Payment Procedure with Forms: Ultimate Guide
The court denying the appeal said that the applicant was undisputedly the managing director of the charged company at the time of the pertinent duration, and the sanction order recorded that both the directors were responsible tax officers.
“Both the directors have merely accused each other of the default, and none has provided any reason for the actual cause of the delay in the TDS deposits,” the Court stated and denied interference with the summoning order.
| Case Title | Dr Manoj Khanna Vs. Income Tax Office |
| Case No. | CRL.M.C. 7461/2025 |
| For Petitioner | Mr Yogesh Jagia, Mr Amit Sood, Mr Tarun Dev |
| For Respondent | Mr Siddhartha Sinha |
| Delhi High Court | Read Order |
