Managing Director of M/S Kitty Steels Ltd., Hyderabad

Sentenced for 3 Months along with the Fine of Rs. 5000/- Each for the Two Offences Committed under Section 276B and 276C of the Income Tax Act

The Court of the Special Judge, Economic offences, Nampally, Hyderabad has sentenced the Managing Director of M/s Kitty Steels Ltd., Hyderabad to rigorous imprisonment for 3 months along with the fine of Rs. 5000/- each for the two offences committed under Section 276B and 276C of the Income Tax Act The assessee company had deducted tax at source from the salaries, dividends and payments made to the contractors, but had not deposited the tax so deducted to the credit of the Central Government within the prescribed time. The assessee company had also failed to issue the requisite certificates of TDS u/s 203 of the Income Tax Act. The Hon’ble Court, after hearing both sides and perusing the documents came to the conclusion that the assessee had willfully attempted to evade the payment of tax and had committed offences punishable u/s 276B and 276C(2) of the Act.

Willful TDS non-deposit triggers criminal liability and imprisonment plus fines under income tax penal provisions. Willful failure to remit tax deducted at source and failure to furnish TDS certificates constitute criminal offences under the Income Tax Act. The company deducted tax from salaries, dividends and contractor payments but did not deposit the amounts within the prescribed time and failed to issue required certificates. The managing director, as the responsible officer, was prosecuted under the penal provisions for TDS non-deposit and failure to provide certificates and was sentenced to imprisonment and fined for those offences.