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TMI Blog2020 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... nd contrary to section 276 - Second contention urged by petitioners is also misconceived for the reason that the said argument is also built upon Annexure-'B'. Learned counsel has based his argument on the impression that under the said intimation, a joint notice was issued to all the Companies; but it is not so. On the other hand, order passed under section 201(1) and 201(1A) (Annexure-'E') makes it evident that the order was passed only against petitioner - Company and not against all the Companies as contended by learned counsel for petitioners. Therefore, even this plea is liable to be rejected. Tax deducted at source by the petitioners was remitted much earlier to the issuance of sanction order, which fact is not reflected in the sanction order indicating that the sanction order has been issued without application of mind - Coming to the next contention that the sanction order issued for prosecution of petitioners does not reflect application of mind is concerned, I have gone through the said sanction order wherein the Commissioner of Income Tax/ Sanctioning Authority has narrated the facts of the case, referred to provisions of law applicable to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whereas the prosecution is launched only against the petitioners which is legally untenable. The Company is a juristic person and in terms of section 2(35) of the Act, notice is required to be issued to each of the companies individually and not a composite notice as done in the instant case. Hence, the prosecution launched against the petitioners suffers from basic vice. Second, the show cause notice was issued only to petitioner No.1 namely Managing Director and not to the Company - petitioner No.2 and in that view also, the prosecution launched against the petitioners are defective and contrary to section 276 of the Act. Third, the impugned sanction in the instant case has been accorded without application of mind. Tax deducted at source by the petitioners was remitted much earlier to the issuance of sanction order, which fact is not reflected in the sanction order indicating that the sanction order has been issued without application of mind and on this score also, the impugned proceedings are liable to be quashed. Lastly, it is contended that the section provides for mandatory term of imprisonment coupled with fine in respect of the offences commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, referred to provisions of law applicable to the facts and has observed that an opportunity was given to the assessee in default to make the payment. Para 6 of the sanction order dated 15.10.2015 reads as follows:- 6. Opportunity: This office has sent show cause notices dated 02.05.2014, 24.06.2014, 12.08.2014 under section 276B read with section 278B of the Income Tax Act, 1961, requiring the deductor to show cause why prosecution proceedings should not be initiated for the said default of non-remittance of TDS to Central Government Account. Under the said circumstances, if any amount was paid pursuant to the said show cause notice, the proof thereof could have been produced by petitioners so as to avoid criminal prosecution. There is nothing on record to show that the remittances made by petitioners have been brought to the notice of the Central Government. 6. Learned counsel for petitioners has produced the copies of the communication obtained from the Office of Assistant Commissioner of Income Tax (TDS), Circle-I(1), Bangalore along with challan details report for making payments. It reflects that on 10.09.2014 a sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scheme of various enactments and also the Indian Penal Code, mandatory custodial sentence is prescribed for graver offences. If the appellants' plea is accepted, no company or corporate bodies could be prosecuted for the graver offences whereas they could be prosecuted for minor offences as the sentence prescribed therein is custodial sentence or fine. We do not think that the intention of the Legislature is to give complete immunity from prosecution to the corporate bodies for these grave offences. The offences mentioned under Section 56(1) of FERA Act, 1973, namely those under Section 13, clause (a) of sub-section (1) of section 18; section 18A; clause (a) of sub-section (1) of section 19; sub-section (2) of section 44, for which the minimum sentence of six months' imprisonment is prescribed, are serious offences and if committed would have serious financial consequences affecting the economy of the Country. All those offences could be committed by company or corporate bodies. We do not think that the legislative intent is not to prosecute the companies for these serious offences, if these offences involve the amount or value of more than one lakh, and that they could b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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