TDS prosecution requires prima facie proof of responsibility for deduction and deposit before criminal liability attaches.

Criminal liability for alleged TDS default requires prima facie material showing that the person was actually responsible for deduction and deposit of tax at source. Where the engagement letter shows only limited assignment and does not indicate that the person was part of management or entrusted with the tax obligation, the foundational basis for prosecution under the Income-tax Act and the Penal Code is absent. On the materials described, the complaint did not establish the petitioner's responsibility for the default, and the prosecution and cognizance order were quashed insofar as they related to him.

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Issues: Whether the petitioner, in the facts of the case, could be proceeded against for offences under the Income-tax Act and the Penal Code when the materials did not show that he was a regular employee or otherwise responsible for deduction and deposit of tax at source.

Analysis: The petitioner's engagement letter showed that his services had been taken for a limited purpose and did not indicate that he was part of the management or entrusted with the obligation to deduct or deposit tax at source. In the absence of material showing that he fell within the definition of employee or was responsible for the default, the basic foundation for fastening criminal liability upon him was missing. Since the complaint and supporting materials did not prima facie establish his responsibility for the alleged TDS default, the Court found it appropriate to exercise inherent jurisdiction to prevent continuation of the prosecution against him.

Conclusion: The prosecution and cognizance order were quashed insofar as they related to the petitioner, and the petition was allowed.

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