TaxTMI 
TaxTMI 
1991 (12) TMI 20
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....91, 3176-M/91, 3179-M/91, 3182-M/91, 3185-M/91, 3191-M/91, 3194-M/91, 3197-M/91, 3263-M/91, 3266-M/91, 3269-M/91, 3272-M/91, 3275-M/91, 3278-M/91, 3281-M/91, 3284-M/91, 3287-M/91, 3290-M/91, 3293-M/91, 3296-M/91, 3299-M/91, 3302-M/91, & 3305-M/91 as common questions of law and fact are involved therein. M/s. Greatway (P) Limited, GT Road, Ludhiana, along with its directors are being prosecuted for an offence under section 278B of the Income-tax Act, 1961 ("the Act" in short). The facts are being drawn from Criminal Miscellaneous No. 2531-M of 1991. A complaint had been filed by the Income-tax Officer, Central Circle V, Ludhiana, on the allegations that, during the perusal of the records of the petitioner-company, it was found that the co....
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.... the Bar that the period during which the offences are alleged to have been committed relate to the assessment years 1978-79 to 1982-83. Section 194C of the Act makes the following provisions for making deductions from payments to a contractor and sub-contractor: "194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company; or....
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....apply accordingly. (3) No deduction shall be made tinder sub-section (1) or subsection (2) from (i) any sum credited or paid in pursuance of any contract the consideration for which does not exceed ten thousand rupees; or (ii) any sum credited or paid before June 1, 1972; or (iii) any sum credited or paid before June 1, 1973, in pursuance of a contract between the contractor and a co-operative society or in pursuance of a contract between such contractor and the sub-contractor in relation to any work (including supply of labour for carrying out any work) undertaken by the contractor for the co-operative society. (4) Where the Assessing Officer is satisfied that the total income of the contractor or the su....
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.... anybody of individuals, means (a) the secretary, treasurer, manager, or agent of the authority, company, association or body, or (b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of his intention of treating him as the principal officer thereof: " In the light of the provisions referred to above, in respect of company, any deductions are to be made by the company and its " principal officer" is one on whom notice has been issued by the Assessing Officer of his intention of treating him as the principal officer of the company. If any offence is committed under section 194C by a company, then only the company and ....
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....fails to deduct or after deducting, fails to pay the tax as required by or under the provisions of sub-section (9) of section 80E or Chapter XVIIB, he shall be punishable (i) in a case where the amount of tax which he has failed to deduct or pay exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine ; (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine. The words " without reasonable cause or excuse " as they occur in section 276B are significant. The act of non-deduction or non-payment was an offence only if the act was....
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....s not one of the ingredients of the offence. The learned single judge did not follow the authority of Manjunatha Tyre Retreading Works v. State of Mysore [1969] 23 STC 428 (Mysore), wherein it had been held that one of the ingredients to prove an offence is the failure to use the goods without reasonable excuse. I am unable to subscribe to the view adopted by M. U. Issac J. in Paramasivan's case [1971] Tax LR 1241 (Ker). I follow the judgment of the Mysore High Court in Manjunatha Tyre Retreading Works' case [1969] 23 STC 428. The grammatical meanings of the section have to be enforced and, in taxation law, the language has to be strictly construed. A plain reading of the section shows that absence of a reasonable excuse or cause is....