TMI Blog1979 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... hin a week from the date of such deductions as prescribed by s. 200 of the Act read with r. 30 of the I.T. Rules, 1962 (hereinafter referred to as " the Rule "). The complaint was with reference to tax deductions made at source on February 15, 1971, February 26, 1971, and March 31. 1971. In respect of the first deduction there was a delay of 105 days, in respect of the second deduction there was a delay of 94 days and in respect of the third deduction there was a delay of 61 days in making the deposit. The failure to deposit the amount within the prescribed period was without reasonable cause or excuse and hence the petitioners have committed offences punishable under s. 276B read with s. 200 of the Act. Consequently, the ITO, Central Circle I11, Madras, who is the complainant, preferred the complaint for the case being taken on file and the petitioners dealt with according to law. In this petition, the petitioners contend that the facts mentioned in the complaint do not disclose the commission of any offence and, therefore, this court, in exercise of its inherent powers, should quash the complaint. The case of the petitioners runs on the following lines: (1) The words " fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y obligation, which words would include in their ambit failure to pay ", would not attract the imposition of penalty unless the party obliged was guilty of conduct contumacious and dishonest-vide Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26, 29; [1970] 25 STC 211 (SC). " Default " means " failure to pay" -vide Saunders' Words and Phrases (2nd Edn., Vol. 2, p. 29), On the other hand, " delay " means, " putting off " or " deferring "-" postponement of performance of some act or step beyond the point of time when the act or step should have been performed "-vide Saunders' Words and Phrases (2nd. Edn., Vol. 2, p. 35). Laying stress upon the meaning given to the words " failure to pay " and " default " on the one hand and " delay " on the other, Mr. Raghavachari submitted that inasmuch as the petitioners had not refused to make the payment or even committed any default in making the payment, but had only made the payment belatedly, the respondent is not entitled to treat the petitioners as defaulters and file a criminal complaint against them under s. 276B. It was the further argument of Mr. Raghavachari that the words "fails to pay " occurring in s. 276B should be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch will render a person liable to the penalty so imposed-vide Cram v. Lawrence [1890] 25 QBD 152, 154(QB): " The first and most elementary rule of construction is that it is to be assumed that the words and phrases of technical legislation are used in their technical meaning if they have acquired one, and otherwise in their ordinary meaning, and the second is that the phrases and sentences are to be construed according to the rules of grammar..." The rule of construction is to intend the Legislature to have meant what they have actually expressed.'-vide Maxwell's Interpretation of Statutes, 12th Edn., p. 28: " Where the language is plain and admits of bat one meaning, the task of interpretation can hardly be said to arise...... The interpretation of a statute is not to be collected from any notions which may be entertained by the court as to what is just and expedient...... The duty of the court is to expound the law as it stands, and to leave the remedy ......... to others "-vide Maxwell's Interpretation of Statutes, 12th Edn., p. 29. I shall now proceed to consider the contentions of Mr. Raghavachari which were as follows: In the first place, it was pointed out that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls to pay the tax. It will, therefore, be reasonable to hold that for belated payment of tax collected the consequences under s. 201 (1A), viz., levy of interest will ensue, whereas if there is a total failure to collect or total failure to pay the tax collected, more serious consequences, viz., prosecution and punishment specified in s. 276B will ensue, A combined reading of ss. 200 and 201(1A) will make it clear that the provisions thereof apply only to cases of belated payment, and not to total failure to pay. A charge of not paying the tax within the prescribed time can be made only against a person who has paid the tax belatedly and not against a person who has not paid the tax at all. It, therefore, follows that for all cases of belated payment, only interest can be charged and a prosecution cannot be launched. In respect of belated payment, even penalty is not leviable under s. 221, because the penalty provisions will be attracted only in regard to continuing default. If that be the position, it will be most inequitable to hold that a prosecution under s. 276B can be launched in cases of belated payments. To commit an offence under s. 276B there must be mens rea or a guil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for a term which may extend to six months, and shall also be liable to fine which shall be not less than a sum calculated at the rate of fifteen per cent. per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid." From a reading of the section, it may be seen that the deduction and payment of tax is to be in accordance with sub-s. (9) of s. 80E or Chap. XVII-B. We are not now concerned with sub-s. (9) of s. 80E which deals with tax deductions in respect of payments by way of annuity or otherwise. We are now concerned only with the provisions contained in Chap. XVII -B. The sections comprised in this chapter are ss. 192 to 206A Section 192 casts a duty upon any person responsible for paying any income chargeable under the head " Salaries ", to deduct, at the time of payment, income-tax on the amount payable at the relevant rate. In respect deductions, that have to be made with reference to other other sums, sections following s. 192 contain directions as indicated below: S. 193: Interest on securities; S. 194: Dividends; S. 194A: Interest other than " Interest on securities"; S. 194B: Winning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the tax. Under s. 221 penalty is imposable on an assessee in default or an assessee deemed to be in default. Such penalty can be imposed in addition to the assessee in default being called upon to pay interest. The proviso to s. 201(1) stipulates that penalty under s. 221 shall not be charged unless the ITO is satisfied that the failure to deduct and pay the tax was without good and sufficient reasons. Section 201(1A) provides for simple interest being charged at 12% per annum on the amount that should have been deducted and paid to the Government. The charging of interest is not subjected to any exception and is an automatic incidence of non-compliance with the provisions of the Act, i.e., failure to deduct the tax or failure to, pay the tax after deduction. Therefore, the charging of interest is compulsory while the imposition of penalty is discretionary depending upon the facts and circumstances of each case. The petitioner's counsel cannot, therefore, be heard to say that in respect of delayed payments interest alone can be charged and even penalty cannot be levied. This only restriction contained in the Act for imposition of penalty is that before penalty is levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 194 ...... shall pay, within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs ". Therefore, the words " a person " occurring in s. 276B must be construed in juxtaposition to the word " person " mentioned in s. 192 and s. 200 of the Act. If so construed, there is no scope for the argument that the words of a person " occurring in section 276B have reference only to a proprietary concern and not to a company as the first petitioner or its principal officer, the second petitioner. Similarly, the argument that since a company cannot be punished with imprisonment, a prosecution under s. 276B will not lie against a company, has to fall to the ground, because none of the sections, namely, ss. 192, 200 and 276B, uses the word " company ". They only use the words " a person " . Merely because the word " person " has been defined to include, among others, a company also, the petitioners cannot contend that the words " a person " occurring in s. 276B have reference only to a company and since a company cannot be punished as indicated in s. 276B, that section will have no application to contraventions committed by a company. Hence, non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of these contentions, Mr. Raghavachari placed reliance on ITO v. Joseph [1972] 83 ITR 362 (Ker) and Kapurchand Shrimal v. TRO (1969] 72 ITR 623 (SC). Even these contentions do not merit acceptance. As already pointed out, s. 276B does not use the word," company ". or " principal officer ". It only uses the term " a person ", and these words have to be construed with reference to the words contained in ss. 192 and 200 of the Act. Though the words " principal officer " or " person responsible to pay " do not find place in s. 276B, we must look to s. 204 for finding out the meaning to be given to the words " person responsible for paying " occurring in ss. 192 to 194 and other sections. It is enough if we consider cl. (i) of s. 204 in this behalf. That clause reads as follows : " 204. For the purposes of sections 192 to 194, section 194A, section 194B, section 194C, section 194D and sections 195 to 203 and section 285, the expression 'person responsible for paying' means (i) in the case of payments of income chargeable under the head 'Salaries', other than payments by the Central Government or the Government of a State, the employer himself or, if the employer is company, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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