Offences by companies – Section 278B - Income Tax - Ready Reckoner - Income Tax

Offences by companies Section 278B (1) Person-in-charge and such company both liable for punishment [Section 278B(1)] - Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Such person shall not be liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Principal Director or Director, Manager, etc,. liable for punishment if offence committed with his consent or connivance or attributable to his neglect [Section 278B(2)] - Where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. (3) Company liable for fine and director, manager, etc., liable for punishment [Section 278B(3)] - Where an offence under this Act has been committed by a person, being a company, and the punishment for such offence is imprisonment and fine, then, without prejudice to the provisions contained in section 278B(1) or (2), such company shall be punished with fine and every person, referred to in section 278B(1), or the director, manager, secretary or other officer of the company referred to in section 278B(2), shall be liable to be proceeded against and punished in accordance with the provisions of this Act. For the purposes of this section,- ( a ) company means a body corporate, and includes- ( i ) a firm; and ( ii ) an association of persons or a body of individuals whether incorporated or not; and ( b ) director , in relation to- ( i ) a firm, means a partner in the firm; ( ii ) any association of persons or a body of individuals, means any member controlling the affairs thereof.