TaxTMI 
TaxTMI 
2022 (9) TMI 1100
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....erned. 4.It is brought to the notice of this Court that the first petitioner in all these petitions expired during the pendency of the proceedings and hence, the proceedings will stand abated insofar as the first petitioner is concerned. In view of the same, the stand taken by the second petitioner alone requires the consideration of this Court in all these petitions. 5.The learned counsel for the petitioner in all the three petitions submitted that the second petitioner was only a non-executive director in A1 Company and she was not involved in the day-to-day affairs of the Company. To substantiate the same, the learned counsel for the petitioner drew the attention of this Court to Form-32 that was filed during the relevant point of time. 6.The learned counsel for the petitioner by pointing out to the judgment of the Hon'ble Supreme Court in the case of GUNMALA SALES (P) LTD.,-Vs-ANU METHA AND OTHERS, reported in 2015 (1) SCC 103 and in the case of POOJA RAVINDER DEVIDASANI-Vs- STATE OF MAHARASHTRA AND ANOTHER, reported in (2014) 16 SCC 1, submitted that the Hon'ble Apex Court had discussed about the difference in classification and categories of Directors and it was he....
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....any. In the show- cause notice, it was asserted that the appellants were considered as principal officers under Section 2(35) of the Act. In the complaint also, it was stated that the other accused were associated with the business of the Company and were treated as principal officers under Section 2(35) of the Act and hence they could be prosecuted. Dealing with an application for discharge, the trial Court observed that accused No.1 was Company whereas other accused were Directors. Whether they could be said to be principal officers or not would require evidence and it could be considered at the stage of trial and the application was rejected. In Revision, the First Additional Sessions Judge took similar view. 43.From the statutory provisions, it is clear that to hold a person responsible under the Act, it must be shown that he/she is a 'principal officer' under Section 2(35) of the Act or is 'in charge of' and 'responsible for' the business of the Company or Firm. It is also clear from the cases referred to above that where necessary averments have been made in the complaint, initiation of criminal proceedings, issuance of summons or framing of charge, ....
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....the I.T. Act, for an offence of non remitting the TDS (exactly the same offence for which the petitioners herein are sought to be prosecuted), the Honble Supreme Court declined to grant relief to the Directors of the company, because they happened to be Directors, and proceeded to hold that their actual role via-avis, the company is a matter for trial. As indicated earlier, that was a case involving the Directors of the company, and not Nominee Directors. It must however, be added that the Supreme Court did not omit to emphasis that a criminal prosecution under Sec.278B of the Income Tax can lie only against those who are in charge of the affairs of, or, responsible for the business of the company. 12.It is clear from the above that this Court had distinguished the judgment of the Hon'ble Apex Court specifically on the ground that the directors, who were the petitioners therein, were nominee directors and the Hon'ble Apex Court did not deal with this category of directors in the said judgment. In the considered view of this Court, the earlier judgment of this Court is clearly distinguishable from the present case, since this Court is dealing with a non-executive director i....
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....#39;' 6.Following the dictum laid down by the Hon'ble Supreme Court in Madhumilan Syntex case [supra], these Criminal Original Petitions are dismissed. Consequently, connected Miscellaneous Petitions are closed." 14.The Hon'ble Apex Court in Madhumilan Syntex Ltd., case had captured the issue involved at paragraph No.30 of the judgment, which has been extracted supra. The answer for the issue is given from paragraphs 43 to 45, which has also been extracted supra. It is clear from the same that where notice has been given to the directors by considering them to be principal officers under Section 2(35) of the Income Tax Act and such averments have also been made in the complaint, the fact as to whether the director was a principal officer or not can only to be decided at the stage of trial and it is not a matter to be decided in a quash petition. 15.In the present case, notice was issued to the second petitioner on 27.07.2017 treating the petitioner as a principal officer of the company, as per Section 2(35) of the Income Tax Act. Similarly, even in the complaint that was filed, a specific reference has been made treating the petitioner as a principal Officer. 16.Th....