Belated Deposit Of TDS Doesn't Extinguish Criminal Liability Under Income Tax Act: Delhi High Court

The Delhi High Court has held that the subsequent or belated deposit of tax deducted at source (TDS) does not absolve an assessee or company officials of criminal liability under Section 276B of the Income Tax Act, 1961.

Justice Amit Mahajan thus dismissed the petition filed by a company's Managing Director, seeking quashing of a criminal complaint and summoning order in a case relating to delayed deposit of TDS amounting to over ₹2.09 crore for the financial year 2017–18.

The plea challenged the complaint instituted by the Income Tax Department for offences under Sections 276B (Failure to pay TDS to credit of Central Government), 278B (offences committed by companies) and 278E (presumption of a culpable mental state) of the Income Tax Act.

Petitioner contended that although there was a delay, the TDS had eventually been deposited.

Disagreeing, the High Court at the outset observed,

“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 added that the explanation of financial difficulty or “reasonable cause”, leading to the delay in filing of the TDS, is a triable defence which can't be adjudicated in the proceedings under Section 528 BNSS.

Petitioner had also sought to argue that another director was solely responsible for compliance of TDS deposit.

Rejecting the plea, the Court observed that Petitioner was undisputedly the Managing Director of the accused company during the relevant period and the sanction order recorded that both the directors were Responsible Officers.

“Both the directors have merely accused each other for the default and none has provided any reason for the actual cause of delay in the TDS deposits,” the Court said and refused to interfere with the summoning order.

Case Title: Dr Manoj Khanna v. Income Tax Office

Citation: 2026 LLBiz HC (DEL) 20

Case Number: CRL.M.C. 7461/2025

For Petitioner: Yogesh Jagia, Mr. Amit Sood & Mr. Tarun Dev, Advs.

For Respondent: Siddhartha Sinha, SSC

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