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2023 (5) TMI 39 - HC - Income TaxCommission of offence u/s 276B r.w.s 278B of Income Tax Act and Sections 409, 34 of IPC - Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B - accused persons were responsible for deductions of tax from the payments of the contractors, employees and others of HEC, Ltd. but on several occasions the accused persons have not deposited the deducted tax 2, within the stipulated period under the Income Tax Act, with the authority - as argued Petitioner was a retainer and not a regular employee and not responsible for deducting tax from any one - HELD THAT - It is an admitted fact that the petitioner is not an employee of HEC, Ltd. The petitioner being not the employee of HEC, never had any control over the affairs of the company including the liability of deducting tax from the employees or the contractor and 4 depositing the same with the department. The petitioner neither falls within the definition of Assessee , Principal Officer nor an Employee . He was also not part and parcel of the management of HEC. The complaint also does not specify any overt act against the petitioner nor it has a single sentence to the effect that the petitioner is responsible for any of the acts which can attract any penal consequences nor it mentions that he was responsible for the daily affairs of the company. This Court after taking into consideration all these aspects has quashed issuance of summons and process against the petitioner 2015 (6) TMI 1254 - JHARKHAND HIGH COURT This Court finds that there is no material to summon the petitioner in the instant case by the Court below. Accordingly, the order taking cognizance passed u/s 276B read with 278B of Income Tax Act and Sections 409, 34 of IPC is quashed and set aside. Misc. Petition is allowed.
Issues involved:
The issues involved in this case are the quashing of criminal proceedings including the order taking cognizance under Sections 276B read with 278B of Income Tax Act and Sections 409, 34 of IPC, based on the petitioner's role as an Advisor Finance at HEC and the alleged non-remittance of TDS deductions to the Income Tax Department. Details of the Judgment: Issue 1: Quashing of Criminal Proceedings The petitioner, an Advisor Finance at HEC, was accused of not remitting TDS deductions to the Income Tax Department on time. The complaint alleged that the petitioner, along with other officers, failed to deposit the deducted tax within the stipulated period. The petitioner argued that he was a retainer and not responsible for tax collection or deposit on behalf of HEC. The Court found that the petitioner was not an employee of HEC and had no control over tax deductions or deposits. The complaint did not specify any overt act against the petitioner, and it was established that he was not responsible for the daily affairs of the company. Considering these factors, the Court quashed the order taking cognizance and set aside the criminal proceedings against the petitioner. Issue 2: Vicarious Liability of the Advisor The prosecution argued that the petitioner, as an Advisor, could be held vicariously liable for the alleged offenses. However, the Court noted that the petitioner's role was limited to providing advice on finance and costing, and he was not part of the management of HEC. It was established that the petitioner did not fall within the definitions of "Assessee," "Principal Officer," or "Employee." The Court found that there was no criminal intention imputed on the petitioner's part regarding the delay in remittance of TDS amounts to HEC. Therefore, the Court concluded that the petitioner could not be held vicariously liable for the alleged offenses. Separate Judgment by the Court: The Hon'ble Court, after considering all aspects and previous similar cases, quashed the issuance of summons and process against the petitioner. The Court found no material to summon the petitioner in the instant case and accordingly quashed the order taking cognizance under Sections 276B, 278B of Income Tax Act, and Sections 409, 34 of IPC. Conclusion: The Court allowed the instant Criminal Miscellaneous Petition and disposed of any pending applications. The order taking cognizance dated 05.10.2001 in Complaint Case No. 41 of 2001 was quashed and set aside, relieving the petitioner of the criminal proceedings based on the lack of evidence linking him to the alleged offenses.
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