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2014 (9) TMI 794 - HC - Income TaxOffense u/s 276B - principal officer - show cause notices addressed to The Principal Officer regarding failure to pay the tax deducted at source - Liability of the Director of a company u/s 276-B r.w Section 194A and 200 – Principle officer - Held that:- Section 278 B of IT Act makes the directors of the company in charge of its affairs liable for the offence committed by it unless the presumption is able to be rebutted by such director - when in the show cause notice it was stated that the directors were to be considered as Principal Officers under the Act, and a complaint was filed, such complaint is entertainable by a Court provided it is otherwise maintainable - The purpose of making explicit either in the SCN or in the complaint, the intention of the ITD that it was proceeding against the directors was to enable the directors to explain why they should not be proceeded against – relying upon Madhumilan Syntax Limited And Others Versus Union of India And Another [2007 (3) TMI 205 - SUPREME Court] - the proceedings against the Directors would be maintainable as long as the complaint clearly stated that they were being treated as principal officers of the company - Even otherwise for the purpose of Section 278 B of the IT Act, once the offence is shown to have been committed by the company, then the liability of the directors in charge of its affairs is attracted - The burden then shifts to such directors to show that the offence occurred without their knowledge or that they had exercised all due diligence to prevent the commission of such offence – both the Courts erred in acquitting the directors of the company only because they were not issued separate notices It is seen that both directors have signed the Company”s balance sheets. Their defence that they were not in charge of the affairs of the company is, therefore, untenable. - Decided in favour of revenue.
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