TaxTMI 
TaxTMI 
2022 (3) TMI 83
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....hing of the entire criminal proceeding including the order dated 08.12.2017, passed by the learned Special Judge, Economic Offences, Dhanbad, in connection with C.O. Case No. 13 of 2017, whereby cognizance has been taken against the petitioners for the offences under Sections 276(B) and 278(B) of the Income Tax Act, pending in the Court of learned Special Judge, Economic Offences, Dhanbad. 4. The complaint was lodged by one Sandeep Ganguly, Assistant Commissioner, Income Tax Department, stating therein:- (i) The complainant is a public servant within the meaning of section 21 of the I.P. Code and the present complaint is being filed by him acting or purporting to act in discharge of his official duty on the strength of sanction order and direction as well as authorization given by the Commissioner of Income Tax (TDS), Income Tax Patna, Sri R. B. Mishra. (ii) The accused no. - 1 is a joint venture company and is juristic person represented through its principal officer i.e., accused no. - 2 and was carrying business of power generator in the name and style of accused no. 1 M/s Maithon Power Limited, having PAN AACCM8705H, having its office at Village Dambhuli, P....
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....credit of Central Government account within prescribed period but the accused persons failed to deposit the aforesaid deducted T.D.S. amount to the credit of TDS Ward Dhanbad on due time without reasonable cause by accused no.- 2 for and on behalf of assessee accused no, - 1 and thereby the accused no.-2 for and on behalf of accused No. 1 committed offence punishable U/s 276B of the I. T. Act. Since the accused no.- 2 committed offence for accused No. 1, it can be safely said that both the accused persons have further committed offence U/s 278B of the I. T. Act also. (viii) That taking into account the aforesaid facts and circumstances a show cause notice was issued vide Letter no. FCIT (TDS) /PATNA /PROSECUTION/2017-18/2905 to 2906 dated 09/11/2017 and served upon the accused as to why a prosecution should not be launched under the appropriate section i.e., Section 276B r/w Section 278B of the I. T. Act against them and in response to the show cause Sri Pradip Roy, Principal officer of M/s Maithon Power Limited filed letter dated 17/11/2017 which had no leg to stand. (ix) After considering the aforesaid facts and circumstances as discussed above a proposal for la....
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.... to launch a prosecution against the accused persons under section 276B r/w Section 278-B of the I. T. Act and authorized / directed the complainant to file a case under section 276B r/w Section 278-B of the I. T. Act before the competent court of Dhanbad against the accused persons for relevant F.Y. 2012-2013. Original sanction order is attached herewith which may be treated as part and parcel of the complaint petition. (xii) The complainant reserves right to produce and prove the relevant documents in accordance with law during the course of trial for the ends of justice and just decision of the case. (xiii) The offences under section 276B r/w Section 278-B of the I. T. Act are continuing offences and come within the purview of Economic Offence and as such the bar of limitation u/s 468 of Cr.P.C. is not applicable in this case. (xiv) The complainant is a public servant and the present complaint is being filed by him in discharge of his official duty and as such the examination of the complainant and witnesses under Sections 200(1) Cr.P.C. is not necessary. (xv) The complainant is a public service and has to go on tours frequently to discharge h....
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....t was already deposited and the interest has also been paid and in the light of Section 95 of the Indian Penal Code, the prosecution was not warranted. He further submits that in light of Section 202 Cr.P.C., the summon was not required to be issued so far as petitioner No. 2 is concerned, who was stationed at Mumbai. 6. To buttress his arguments, learned counsel appearing for the petitioners has relied in the case of Udai Shankar Awasthi Versus State of U.P. & Anr., reported in (2013) 2 SCC 435, wherein in para-40, the Hon'ble Supreme Court held as follows:- "40. The Magistrate had issued summons without meeting the mandatory requirement of Section 202 Cr.P.C., though the appellants were outside his territorial jurisdiction. The provisions of Section 202 Cr.P.C. were amended vide Amendment Act 2005, making it mandatory to postpone the issue of process where the accused resides in an area beyond the territorial jurisdiction of the Magistrate concerned. The same was found necessary in order to protect innocent persons from being harassed by unscrupulous persons and making it obligatory upon the Magistrate to enquire into the case himself, or to direct investigation to be....
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....be noticed that the word 'company' includes a firm or other association and the same test must apply to a director in-charge and a partner of a firm in- charge of a business. It seems to us that in the context a person 'in-charge' must mean that the person should be in over all control of the day to day business of the company or firm. This inference follows from the wording of Section 23C(2). It mentions director, who may be a party to the policy being followed by a company and yet not be in- charge of the business of the company. Further it mentions manager, who usually is in charge of the business but not in over-all-charge. Similarly the other officers may be in charge of only some part of business." 9. He further submits that recently the of Girdhari Lal Gupta (Supra) case has again been considered in the case of Dayle De'souza Versus Government of India through Deputy Labour Commissioner & Anr., reported in (2021) SCC Online SC 1012. Paras-15 and 17 thereof are quoted hereibelow:- "15. Unlike sub-section (2) to Section 22C, sub- section (1) conspicuously does not use the term 'director, manager, secretary or other officer of the company' to bring t....
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.... Act, 1940. The judgment referred to the explanation to Section 34 in the said Act (which is pari materia with the explanation in Section 22C of the Minimum Wages Act, 1948) to observe that for the purpose of imposing liability on the company under the said Section, a company includes a body corporate, a firm or an association of individuals. A director in relation to a firm means a partner in that firm. Therefore, even in the case of partners, when a firm commits an offence, the requirement of either sub-section (1) or sub-section (2) to Section 22C must be satisfied. This means that in terms of sub- section (1), the partner should be "in-charge of" and "responsible to" the firm for the conduct of its business as per the dictum in Girdhari Lal Gupta (supra). Further, as per sub-section (2), a partner may also be liable, just as a director is liable for the conduct of the business of a company, if the offence is committed with the consent or connivance of, or is attributable to any neglect on the part of the partner concerned." 10. Relying on these two judgments, learned counsel appearing for the petitioners submits that the complainant has not disclosed in the complaint as to h....
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....irm to the Income Tax Department has nothing to do with the criminal prosecution, because it is distinct provision inviting penal action for the default committed by the Firm. 4. They are liable both, for recovery of amount with interest and penalty so also for prosecution for having committed offence punishable under Section 276B of the Income Tax Act, for their failure to pay the amount within the prescribed period and as the respondent - Firm is a Partnership concern all the partners of the firm as contemplated under Section 278-B would be liable to be prosecuted." 13. She further submits that the point of delay in crediting of the TDS amount, the subject matter of that fact can only be ascertained in the trial only. To buttress her augments, she relied in the case of Shaw Vallace & Co. Ltd. Versus Commissioner of Income Tax (TDS) & Ors., reported in (2003) SCC Online Cal 787. Para-8 thereof is quoted hereunder:- "8. After hearing learned counsel for the parties and after going through the materials on record, I am, however, not inclined to entertain this application at this stage. In a given case whether there is just and sufficient reason for not depositin....
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....PC, at the stages referred to hereinabove, would have far-reaching consequences inasmuch as it would negate the prosecution's/complainant's case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under Section 482 Cr.P.C. the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality.....
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....irst initiation was also done in the evening and for the transaction between 10.00 P.M. to 11. 00 P.M on 07.03.2013, the status description discloses 'completed successful.' Meaning thereby that the petitioners have taken steps within time, however, the same was credited in the account of the Central Government on 08.03.2013. 19. It is also an admitted fact that the interest for one day has also been paid. Seeing Rule-30(2)(B) of the Income Tax Rules and the Bank document, it transpires that the liability cannot be fastened upon the petitioners on the ground that the initiation of payment of TDS shall not be taken at the right time. The documents, available on record did not disclose how two months have been taken place in crediting the said amount, as has been argued by the learned counsel appearing for the O.P. No. 2. This stand of O.P. No. 2 is not accepted by this court. The judgment relied upon by learned counsel appearing for the O.P. No. 2 on the point of delay of the Kolkata High Court and the Bombay High Court on the point of civil liability and the criminal liability are on different footing. It is well settled that if the facts are disputed, the High Court is not requ....
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....that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of this section,- (a) ' company" means a body corporate, and includes- (i) a firm; and (ii) an association of persons or a body of individuals whether incorporated or not; and (b) " director', in relation to- (i) a firm, means a partner in the firm; (ii) any association of per- sons or a body of individuals, means any member controlling the affairs thereof.]" 21. On a reading of this Section it is crystal clear that a person, who at the time of offence was committed, was in-charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. It has not been disclosed i....