JUDGMENT
1. This application in revision is directed against the order dated May 15, 1971, passed by Sri R.K. Singh, Munsif-Magistrate, First Class, Dhanbad, in Complaint Case No. 39 of 1970 by which he convicted opposite parties Nos. 1 to 3 under Clauses (b) and (d) of Section 276 of the I.T. Act, 1961 (hereinafter referred to as “the Act”), on their pleading guilty, and sentenced each of the opposite parties Nos. 1 and 2, to pay a fine of Rs. 214 (two hundred and fourteen) and in default to undergo fifteen days’ simple imprisonment and, opposite party No. 3, to pay a fine of Rs. 50 (fifty) and in default to undergo simple imprisonment for a period of seven days.
2. Opposite party No. 1 is a limited company under the name and style of M/s. East India Coal Co. Ltd. incorporated under the Indian Companies Act having its office at Jorapokhar, Police Station Jealogora, District Dhanbad and opposite party No. 2 is the managing agent of the above-named company, opposite party No. 3 is the principal officer of opposite party No. 2 which is a firm under the name and style of M/s. Jardine Handerson Ltd. and is responsible for the management and administration of the firm. A petition of complaint was filed by the petitioner before the Sub-divisional Magistrate, Dhanbad, against the opposite parties alleging that the opposite parties collected income-tax and super-tax on various dates to the tune of Rs. 2,99,863.10 from the salaries of their employees, but did not deposit the same within the prescribed period and made a default in depositing the same to the credit of the Central Govt., the detailed description of which is given in annex. 2 to this application. The opposite parties also defaulted in submitting the annual return by 114 days, which will appear from annex. 3 to this application. In these circumstances, according to the petitioner, the opposite parties had violated the terms of Section 290 of the Act read with Rule 30(1)(b) of the I.T. Rules, 1962 (hereinafter
referred to as “the Rules”) and also Section 206 of the Act read with Rule 35(1) of the Rules and, thereby, they were liable to punishment under Section 276 of the Act. As already stated above, the opposite parties pleaded guilty before the learned Munsif-Magistrate to whom the case had been transferred for disposal and were convicted by the learned Munsif-Magistrate on that plea by the impugned order. No appeal has been filed on behalf of the opposite parties against their conviction. The petitioner has filed this revision for enhancing the sentence passed by the learned Munsif on the ground that the sentences passed against the opposite parties were, in the circumstances, not only lenient, but had been passed without any regard to the relevant provisions of law and the circumstances of the case. It will appear from annex. 3 to this application that the return for the financial year 1967-68 had to be submitted by the opposite parties by April 30, 1968, but it was submitted on August 22, 1968. Thus, the opposite parties made a delay of 114 days in submitting the return. It is not disputed that this constituted a contravention of Section 206 of the Act making the opposite parties liable to punishment under Section 276(b) of the Act. It will also appear from the chart annexed from May 1, 1967 to April 1, 1968, that the opposite parties deducted the amount of tax from the salaries of their employees on different dates, but made default in depositing the said amount to the account of the Central Govt., as provided in the Act, and thereby were liable to punishment under Section 276(a) of the Act. For an offence under Section 276 of the Act, the maximum penalty provided is at the rate of Rs. 10 for every day during which the default continues. It will thus appear that the maximum penalty which could be imposed on the opposite parties for submitting the return after a delay of 114 days was Rs. 1,140. As regards the default in depositing the amount by the opposite parties to the account of the Central Govt. realised from the salaries of their employees, that chart, appended to annex. 2 will show that the opposite parties had made delays in 15 cases and the periods of delay extended from 21 days to 130 days. The amounts collected by the opposite parties were also by no means small. They varied from Rs. 804 to Rs. 34,073. After the amounts had been deducted from the salaries of the employees, the opposite parties had no justification to keep the money in their account as the money must be deemed to have belonged to the government from the day it was realised by the opposite parties after deduction. It appears that on May 15, 1971, the opposite parties appeared before the learned Munsif-Magistrate and filed a petition stating that they were pleading guilty to the accusation and, further, stated that the delay in filing the return or depositing the money to the account of the government was due to strike and abnormal conditions prevailing in Calcutta town, but, after the date, they had since deposited the money and submitted a return and had also deposited Rs. 4,409 as penal interest for the delayed payment. It has been contended by learned counsel for the opposite parties that it was after considering these circumstances that the penalty had been imposed by the learned Munsif-Magistrate, and, since in the circumstances, the sentences could not be said to be lenient or unreasonable, there is no ground for interference with that order in this revision. It may, however, be stated that the chart appended to annex. 2 referred to above, shows that the opposite parties had been committing defaults in depositing the money realised by them, from the salaries of their employees to the account of the government since May 1, 1967, to April 1, 1968, and during the period of one year they had made defaults in respect of 15 items. It is not mentioned in the petition filed by the opposite parties as to when the strike was prevailing in Calcutta. At any rate, there is nothing to show that all these delays during the whole year were because of the abnormal conditions prevailing in Calcutta throughout the year. Therefore, we feel that there was absolutely no material on the record to show even prima facie, that there was any justification in making delayed deposits of the money as shown in the chart attached to annex. 2. As already stated above, in some cases, delays of 130 days and 122 days had been made. It is also clear that during the period the money realised by the opposite parties, as already stated above, was lying to the credit of the opposite parties and was earning interest on that money, which must be deemed to be the money of the government, who have been deprived of that income. This circumstance ought to have been considered by the learned Munsif-Magistrate in passing the sentence of fine against the opposite parties. The ground stated in several terms in the petition filed on behalf of the opposite parties on May 15, 1971, that the delay was due to strike was not, in our opinion, sufficient to call for a lenient sentence of fine as imposed by the learned Munsif-Magistrate. Learned counsel roughly worked out the total interest at the rate of 12 per cent. per annum which could accrue on the amounts shown in the chart attached to annex. 2 during the different periods of defaults made in respect of these amounts. It roughly comes to Rs. 6,792. As already indicated above, the maximum punishment for the default in filing the return will come to Rs. 1,140 only. Even if we ignore this item, there was no justification for allowing the opposite parties to be let off without penalties of at least that amount, which they had earned or are expected to have earned as interest from the money kept at their disposal, which really belonged to the government for the period during which they did not deposit the same in contravention of the law. Even if we take into consideration the fact that they had been subjected to pay a penalty of Rs. 4,409 to the I.T. Department, as stated by them in their petition dated
May 15, 1971, there appears to be no justification that the opposite parties should have been let off only with a fine of Rs. 214 each for both the offences under Sections 276(b) and 276(d) of the Act. Considering these circumstances, which, in our opinion, are not such as can be ignored, we feel that the punishment awarded by the learned Munsif-Magistrate, is far too low to be deemed reasonable. We are, therefore, constrained to hold that the sentence requires interference. We, accordingly, enhance the sentence of fine to Rs. 2,000 (two thousand) against each of opposite parties Nos. 1 and 2 in the circumstances mentioned above. The period of imprisonment of fifteen days in default in each case will remain as it is. We, however, do not think it necessary to interfere with the sentence passed against opposite party No. 3.
3. The application, is accordingly, allowed.
