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June 2025

Offences and prosecution — Deduction of tax at source — Delay in payment of tax deducted at source — Delayed payment of tax deducted at source to Department with interest without objection by Department — Delay explained by assessee as due to crisis in company — No malafide intention of evasion on part of assessee — Prosecution after a lapse of more than three years quashed:

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 3 mins

15. SVSVS Projects Pvt. Ltd. vs. State of Telangana:

[2025] 474 ITR 306 (Telangana):

A.Ys. 2011-12: Date of order 30th January, 2024:

S. 276B of ITA 1961:

Offences and prosecution — Deduction of tax at source — Delay in payment of tax deducted at source — Delayed payment of tax deducted at source to Department with interest without objection by Department — Delay explained by assessee as due to crisis in company — No malafide intention of evasion on part of assessee — Prosecution after a lapse of more than three years quashed:

There was an allegation against the Assessee that for the AY 2011-12, TDS was deducted by the Assessee but not deposited with the Central Government in time. As per the data available online, there was a delay on 39 occasions and on the basis of several such delays, it was alleged that the Assessee deliberately did not deposit tax to the credit of Central Government which was a punishable offence u/s. 276B. The Assessing Officer issued a letter dated 16/01/2013 stating that the tax deducted at source payable was ₹77,37,097 which was delayed and the interest for such delay was ₹13,36,278. However, the Assessee had paid interest of

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A. Offences and Prosecution — Sanction for prosecution — Deduction of tax at source — Delay in depositing with revenue — Assessee depositing tax deducted with Revenue for A.Ys. 2012-13 to 2018-19 with interest though belatedly — Effect of circulars issued by CBDT — Interpretation of provisions of s. 276B to include delay in deposit of tax deducted at source manifestly arbitrary — Prosecution quashed: B. Offences and prosecution — Sanction for prosecution — Principal Officer — Directors of Assessee company prosecuted for delay in payment of tax deducted at source with Revenue — Non-issue of notice and order to treat any of them as principal officer of the assessee — No order imposing penalty as “deemed to be an assessee in default” on assessee or its directors — Criminal complaints against directors of assessee not stating consent, connivance or negligence on their part as required u/s. 278B(2) — Directors of assessee cannot be prosecuted: C. Offences and prosecution — Deduction of tax at source — Scope of s. 278B(2) — Conduct of business of company must have nexus with the offence committed — Amendment in law from year 1997 — Use of the phrase “as required by or under the provisions of Chapter VII-B” — Linked only with and explains manner of deduction of tax and payment thereof — Assessee deposited entire tax deducted at source with Revenue for A.Ys. 2012-13 to 2018-19 with interest belatedly — Prosecution quashed:

Salary — Perquisites :— 1) Meaning of perquisite — Condition precedent for considering payment as perquisite — Amount must have been paid to the Assessee as employee — Stock options provided to ex-employees — Stock option was not perquisite — No exercise of stock option — No income chargeable to tax; 2) Assessability — Stock options given to ex-employee — No exercise of stock option — No income chargeable to tax: