Case Law Details
Onora Hospitality Pvt. Ltd. Vs ACIT (Karnataka High Court)
The issue under consideration is whether the prosecution of the petitioners for the offence punishable under section 276B of the Income Tax Act could be sustained without determination of the liability of the petitioners under section 201 of the Act?
In the given case, it was detected that accused company had deducted tax at source but had failed to remit the same to the Central Government account as per the provisions of Chapter XVII-B of the Act. Hence the Commissioner of Income Tax (TDS) after giving sufficient opportunity to the accused, passed an order under section 279 to prosecute the accused for the offence punishable under section 276B read with section 278B of the Act.
A bare reading of the section 201, makes it clear that without prejudice to any other consequences, which the accused may incur, he is deemed to be “an assessee in default” in respect of such deduction. Therefore, it follows that in case of failure to deduct or to pay the tax deducted at source, accused may invite penalty consequent upon the adjudication or it may also “without prejudice to any other consequences”, lead to prosecution of the accused.
So far as prosecution under section 276B is concerned, it is not controlled either by section 201(1A) or section 221. All that the section says is that if a person, without reasonable cause or excuse, fails to deduct or after deducting fails to pay the tax, as required by or under the provisions of sub-section (9) of section 80E or Chapter XVII-B, he shall be punishable with rigorous imprisonment and shall also be liable to fine. On the other hand, what we find is that the power of prosecution given under section 276B is not restricted to a particular type of cases alone”.
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