Directors held liable for tax non-payment, notice not required before prosecution. Delay issue left for trial. The Court upheld the complaints against a Company and its Directors for failure to deposit deducted tax to the Central Government within the prescribed ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Directors held liable for tax non-payment, notice not required before prosecution. Delay issue left for trial.
The Court upheld the complaints against a Company and its Directors for failure to deposit deducted tax to the Central Government within the prescribed time. It rejected the argument that no notice to Directors was issued before prosecution, citing Supreme Court precedent. The Court deemed the delay in granting sanction as a factual matter for trial and declined to quash the complaints, directing the issues to be addressed before the trial Court. The petitioners were excused from appearing before the trial Court due to their age, and the Criminal Original Petitions were dismissed along with the connected Miscellaneous Petitions.
Issues involved: Challenge to complaints under Section 276 B r/w 278 B of the Income Tax Act, 1961.
Summary: 1. The petitions challenged complaints alleging failure to deposit deducted tax to the Central Government within the prescribed time for three assessment years.
2. The petitioners argued that the assessing officer did not issue a notice under Section 2 (35) of the Income Tax Act to the Directors before prosecution, citing precedents. They also contended that the delay in granting sanction by the Commissioner of Income Tax violated Board instructions under Section 119 of the Income Tax Act.
3. The respondents argued that separate notice to Directors was unnecessary as per Supreme Court precedent and that the delay in granting sanction was due to the petitioners' belated reply, which is allowed under the instructions.
4. The Court found that the Company and its Directors were prosecuted for the offence under Section 276 B of the Income Tax Act, rejecting the argument that no notice to Directors was issued. Citing Supreme Court precedent, the Court held that initiation of criminal proceedings based on necessary averments in the complaint is valid.
5. Regarding the belated sanction issue, the Court noted it as a factual matter to be decided at trial and declined to quash the complaints, stating that the points raised should be addressed before the trial Court.
6. The Court dispensed with the appearance of the petitioners before the trial Court considering their age, and dismissed the Criminal Original Petitions, closing the connected Miscellaneous Petitions.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
