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2024 (2) TMI 1240 - HC - Income Tax“Principal Officer” of the company for the purposes of initiating prosecution u/s 276B - default by the company to deposit TDS within the stipulated statutory period - HELD THAT:- As per Section 2(35) of IT Act clause (a), insofar as a company is concerned provides that the Secretary, Treasurer, Manager, or Agent thereof would be liable to be treated as the “Principal Officer”. Clause (b), however, speaks of a person connected with the management or administration of the company being liable to be treated as the “Principal Officer”. In our considered opinion merely because a person holds an office in a corporate entity would not be sufficient to place that individual in clause (b). The intention of the respondent to treat an individual as the “Principal Officer” must be based on it being satisfied that the person was connected with the management or administration of the company. While the respondents have referred to additional material in the counter affidavit and which clearly does not find notice or mention in the impugned orders in support of their contention that the petitioner was correctly identified as the “Principal Officer”, we find that those averments and assertions clearly travel far beyond what was alleged and asserted in the notices issued originally. Thus for the purposes of an individual being tried, it is mandatory for the respondents to establish that the person was in fact connected with the management and administration of the company. Thus we find ourselves unable to sustain the view as expressed by the respondents in the impugned order - respondents would have to examine the issue afresh bearing in mind the response which had been submitted by the petitioner and upon due inquiry being made with respect to whether the petitioner could be said to be a person connected with the management or administration of the company in question. The answer to the question which stands posited in the backdrop of Section 2(35) would have to be examined afresh and in light of the observations appearing hereinabove. Allow the instant with petition and set aside the impugned order.
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