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2020 (1) TMI 53 - HC - Income TaxProsecution u/s 276-B - failure to remit the tax deducted at source during the financial year 2010-2011 and 2011-2012 - as per petitioner show-cause notice is issued in respect of nine companies whereas the prosecution is launched only against the petitioners which is legally untenable - HELD THAT:- After narrating the circumstances of notice, it is stated therein that the said notice was issued to convey the intention of the Department to treat him as the Principal Officer of the above companies. It is not a show cause notice. On the other hand, in the complaint, it is specifically stated that show cause notice was issued to accused on 14.08.2013. Petitioner has not referred to the said document. Therefore, the argument of learned counsel for petitioners based on Annexure-'B' is totally misconceived and cannot be a ground to quash the proceedings. Show cause notice was issued only to petitioner No.1 namely Managing Director and not to the Company - petitioner No.2 and in that view also, the prosecution launched against the petitioners are defective and contrary to section 276 - Second contention urged by petitioners is also misconceived for the reason that the said argument is also built upon Annexure-'B'. Learned counsel has based his argument on the impression that under the said intimation, a joint notice was issued to all the Companies; but it is not so. On the other hand, order passed under section 201(1) and 201(1A) (Annexure-'E') makes it evident that the order was passed only against petitioner - Company and not against all the Companies as contended by learned counsel for petitioners. Therefore, even this plea is liable to be rejected. Tax deducted at source by the petitioners was remitted much earlier to the issuance of sanction order, which fact is not reflected in the sanction order indicating that the sanction order has been issued without application of mind - Coming to the next contention that the sanction order issued for prosecution of petitioners does not reflect application of mind is concerned, I have gone through the said sanction order wherein the Commissioner of Income Tax/ Sanctioning Authority has narrated the facts of the case, referred to provisions of law applicable to the facts and has observed that an opportunity was given to the assessee in default to make the payment. If any amount was paid pursuant to the said show cause notice, the proof thereof could have been produced by petitioners so as to avoid criminal prosecution. There is nothing on record to show that the remittances made by petitioners have been brought to the notice of the Central Government. Petitioners has produced the copies of the communication obtained from the Office of Assistant Commissioner of Income Tax (TDS), Circle-I(1), Bangalore along with challan details report for making payments. It reflects that on 10.09.2014 a sum of ₹ 1,52,675/- and another sum of Rs,1,69,974/- was remitted not by the petitioners herein, but by Avestha Gengraine Technologies Private Limited. The said remittances do not relate to the case in hand. As a result, even the sanction order does not reflect any errors warranting interference by this Court. Hence, this argument is also rejected. Section provides for mandatory term of imprisonment coupled with fine in respect of the offences committed by a company - The last contention, urged by learned counsel for petitioners is no more res integra in view of the Constitution Bench decision of the Hon'ble Supreme Court in Standard Chartered Bank v. Directorate of Enforcement [2005 (5) TMI 327 - SUPREME COURT] we hold that there is no immunity to the companies from prosecution merely because the prosecution is in respect of offences for which the punishment prescribed is mandatory imprisonment
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