1971 (11) TMI 7 - HC - Income Tax

Offence Act of 1922 Act of 1961 failure to remit tax deducted from dividend continuing offence - If the offence was completed when Indian Income-tax Act 1922 was in force whether prosecution could be launched under Income-tax Act 1961 held that offence did not survive so as to form the subject-matter of a charge under section 276(d) of the Income-tax Act 1961 - order of acquittal entered by the learned sessions judge is proper and in confirmation of it this appeal is dismissed

Summary

Issues:
1. Acquittal of the accused under sections 276(d) and 276B of the Income-tax Act, 1961.
2. Determination of the accused as the principal officer of the company for tax deduction.
3. Prosecution under the 1961 Act for failure to pay tax deducted under the 1922 Act.

Analysis:
1. The judgment deals with an appeal by the State against the acquittal of the accused under sections 276(d) and 276B of the Income-tax Act, 1961. The accused, as the principal officer of a company, was charged with not crediting the deducted income tax to the Central Government. The court considered previous cases and found that the offence committed under the 1922 Act did not survive after the enactment of the 1961 Act, leading to the acquittal of the accused under both sections.

2. The court analyzed whether the accused was the principal officer of the company and had deducted the tax in that capacity. The Income-tax Officer testified that documents submitted by the accused showed his role as the principal officer. The court accepted this evidence and found that the accused had indeed deducted the tax but failed to pay it within the specified time, as required by the Income-tax Rules under both the 1922 and 1961 Acts.

3. The crucial issue addressed was whether the prosecution could be maintained under the 1961 Act for the failure to pay tax deducted under the 1922 Act. The court emphasized that the offence of not remitting tax to the Central Government was complete upon the expiry of the specified time for payment. It was concluded that the offence did not continue after the 1961 Act came into force, as the penalty for non-payment was already provided for under the 1922 Act. Therefore, the court upheld the acquittal of the accused, as the offence did not survive to be charged under section 276(d) of the Income-tax Act, 1961.

In conclusion, the High Court dismissed the appeal by the State, affirming the acquittal of the accused based on the analysis of the issues related to the applicability of the Income-tax Acts, the role of the accused as the principal officer, and the completion of the offence under the 1922 Act.