Income-Tax Department Vs Vishweshwara Rao Chava (Karnataka High Court)
Karnataka High Court held that prosecution against director of the company for non-remittance of TDS by company is tenable. Accordingly, petition of revenue allowed.
Facts- The complainant / Income Tax Department by its Assistant Commissioner of Income Tax, TDS Circle-3(1) filed the complaint u/s. 200 of the Code of Criminal Procedure, 1973 alleging that accused No.1 – Company and other accused had not remitted the deducted Tax Deducted at Source (TDS) of Rs.4,84,69,841/- pertaining to the financial year 2013-14 and thereby, committed an offence punishable u/s. 276B of the Income Tax Act, 1961. Accused Nos.2 to 6 being the Directors vicariously liable for the offence committed by the accused No.1 by virtue of Section 278B of the Act.
Conclusion- Held that wherever a company is required to deduct tax at source and to pay it to the account of the Central Government, failure on the part of the company in deducting or in paying such amount is an offence under the Act and has been made punishable. It, therefore, cannot be said that the prosecution against a company or its directors in default of deducting tax or paying tax is not envisaged by the Act.
