Prosecution u/s 276B quashed as delay in depositing TDS was due to staff maternity leave

Prosecution u/s 276B rws 278AA quashed by High Court as delay in depositing TDS was due to maternity leave of the staff and subsequent conduct of the assessee

In a recent judgment, Hon’ble High Court has quashed the prosecution u/s 276B / 278AA launched by the Income Tax Department for delay in depositing TDS was due to he concerned staff left the concern on maternity leave and subsequently the assessee deposited TDS in due time.

ABCAUS Case Law Citation:
ABCAUS 3884 (2024) (02) HC

In the instant case, the assessee had filed a Writ Petition before the Hon’ble High Court challenging the prosecution filed by the Income Tax Department for offence punishable under Section 276 B r/w Section 278AA of the Income Tax Act, 1961 (the Act) for delay In the instant case, the assessee was a charitable institution running an education institution.

According to the Department, the Petitioner was liable to deduct tax at source in respect of expenditure covered by the provisions of Chapter XVIIB of the Act. However, it though having deducted the tax at source, remitted the same belatedly and the same was seen from the data collected from system, thereby there was a significant failure on the part of accused to pay the tax deducted at source to the Government account within the time limit as required under law.

Therefore, the respondent initiated a complaint against them. According to the prosecution, the petitioners had belatedly paid the tax and there was seven months delay in each deduction. Whereas, it had to be made within 6 or 7 days from the last day of the month and only tax deduction is made and thereafter it was not remitted, thereby the Petitioner had violated the provision of Sec.200(1) of the Act.

On the other hand, the Petitioner submitted that submit that the delay on their part was neither wanton nor any malafide intention. In fact, during that period, the staff, who was looking after the accounts left the concern on maternity leave. So, proper instructions was not given to the petitioners. Hence, the delay was occurred, however, they have remitted the tax amount. Therefore, they prayed to quash the proceedings initiated against them.

The Hon’ble High Court observed that there was a delay on the part of petitioners and they had subsequently remitted the tax amount and delay was not caused wantonly, but only due to the concerned staff left the concern on maternity leave, the delay was caused.

Furthermore, the Hon’ble High Court noted that it was subsequently rectified and thereafter, they have deducted the tax amount properly and remitted the same without any delay. So, on seeing the conduct of petitioners, the proceedings initiated against them is liable to be quashed.

Accordingly, the Petition was allowed and the proceedings on the file of Judicial Magistrate was quashed.

Download Full Judgment Click Here >>

• If assessee fails to explain source of purchases, estimating profit rate contrary to Section 69C
• Income Tax Department not trusted even upon its lawyers – SC slams ITD for delay
• Goods loaded in two trucks with one e-way bill stating both truck numbers – No evasion
• GOI makes four new Labour Codes  effective from 21st November 2025
• Provident fund dues have first charge over claim of bank under SARFAESI Act – SC