Vicarious criminal liability for company tax offences requires factual pleading of control or responsibility, not mere nominee directorship.

Section 278B vicarious criminal liability for company offences applies only where the complaint pleads a factual basis showing that the accused was in charge of, and responsible for, the company's business, or was personally involved through consent, connivance, or neglect. A non-executive nominee director is not liable merely because of office, and a bare assumption that every director is a principal officer is insufficient. Without material showing control over, or legal responsibility for, the company's affairs, prosecution for non-remittance of tax deducted at source is unwarranted.

---

---

Issues: Whether non-executive nominee directors, not shown to be in charge of or responsible for the conduct of the company's business, can be prosecuted for non-remittance of tax deducted at source under Section 278B of the Income-tax Act, 1961.

Analysis: Liability under Section 278B attaches only to persons who were, at the time of the offence, in charge of and responsible to the company for the conduct of its business, or whose consent, connivance, or neglect is specifically shown. A nominee or non-executive directorship, by itself, does not establish such responsibility. The complaint must disclose some factual foundation showing that the directors had control over, or a legal duty in relation to, the company's affairs. A mere assumption that every director is a principal officer is insufficient, and prosecution without such foundation would be unwarranted.

Conclusion: The petitioners, being non-executive nominee directors with no material showing that they in charge of the company's affairs, could not be subjected to criminal prosecution under Section 278B.

Ratio Decidendi: Vicarious criminal liability for offences by a company under Section 278B arises only where the complaint discloses, with factual basis, that the accused was in charge of and responsible for the company's business or otherwise personally involved through consent, connivance, or neglect; a non-executive nominee director is not liable merely by virtue of office.

---