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TMI Blog1997 (7) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years 1976-77 and 1977-78 against the accused-applicants alleging commission of offence under section 276B/194A of the Act. It is alleged that the applicants have failed to deduct tax at source as required under section 194A. In response to the summons issued by the court, the accused-applicants have put in their appearance. Three witnesses were examined by the court below as evidence before charge. On a consideration of the evidence and after hearing both the parties, the court vide order impugned has framed charge against the applicants as aforesaid. I have heard Shri S. C. Bagadia, learned senior counsel appearing with Shri R. S. Chhabra for the applicants and Shri P. K. Saxena, learned senior counsel appearing with Shri P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been noticed and heard for the purpose whether it was a fit case to compound. Reliance is placed on the decisions of the High Courts of Rajasthan, Karnataka and Calcutta in Shree Singhvi Bros. v. Union of India [1991] 187 ITR 219; P. V. Pai v. R. L. Rinawma, Deputy CIT [1993] 200 ITR 717 and Dunlop India Ltd. v. Arun Chandra Sinha, Asst. CIT [1995] 211 ITR 79, respectively. In all these cases it has been held that where other alternatives were available to the Department and remedy of launching prosecution was optional, it was essential that the accused be afforded an opportunity of being heard before filing prosecution. The High Court of Madras has, however, taken a contrary view in P. Jayappan v. S. K. Perumal, First ITO [1984] 149 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Crawford v. Spooner [1846] 6 Moor (PC) 1, 8, 9) : "We cannot aid the Legislature's defective phrasing of an Act, we cannot add and mend, and by construction, make up deficiencies which are left there." In Seaford Court Estates Ltd. v. Asher [1949] 2 All ER 155, 164 (CA), Lord Denning observed : "A judge must not alter the material of which the Act is woven, but he can and should iron out the creases". There are no creases to be ironed out. The legislative intent is clear. Section 279(2) of the Income-tax Act provides that : "(2) Any offence under this Chapter may, either before or after the institution of proceedings, be compounded by the Chief Commissioner or a Director-General." It is thus clear that composition of an offence u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or whether the case deserved to be compounded. I may also mention that the applicant did not question the validity of taking cognizance on the first appearance as was possible in view of the decision in K. M. Mathew v. State of Kerala, AIR 1992 SC 2206, and participated without demur in evidence before charge. The challenge was made only at the stage of framing of charge. The belated objection is not sustainable in law even otherwise. I, therefore, hold that it was not necessary to give notice to the accused-applicants before institution of proceedings. Coming to the next point, it will be useful here to read section 278B, which is as follows : "278B. (1) Where an offence under this Act has been committed by a company, every person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue diligence to prevent commission of such offence. It is true that under clause (35)(b) of section 2 of the Act, it is open to the Assessing Officer to serve a notice on a person treating him as principal officer of a firm. But absence of such designation will again not vitiate the prosecution of the firm or its partners. As regards the remaining two grounds Nos. 3 and 4 noted above, I am of the opinion that it is premature to consider the same at this stage of framing of charge. Their effect, if any, after evidence, may be considered by the trial court at the appropriate stage. At present I express no opinion on merits. Agreeing, therefore, with the decision of the High Court of Madras and position of law, particularly in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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