Directors Cleared of TDS Delay Charges; No 'Principal Officer' Designation or Default Proven.

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....Delay in deposit of TDS led to a complaint against the company and its directors for an offense u/ss 276B and 278B. However, the TDS was deposited with interest u/s 201(1A). No notice was issued to treat any director as a 'Principal Officer' u/s 201(3), nor was any order passed deeming them 'assessee in default'. For the relevant assessment year, the company was held not to be an 'assessee in default'. No penalty was imposed on the company or directors u/s 221 for failure to pay tax. The directors' roles regarding consent, connivance, or negligence u/s 278B(2) were not established. Prosecuting the directors would amount to abuse of process when the revenue chose not to invoke Section 221 against the company or principal officer. Relying on K.C. Builders case, the petition was allowed.....