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TMI Blog2021 (8) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner is as follows: M/s Andhra Hospitals Eluru Private Limited, a company incorporated under the Companies Act, had deducted a sum of Rs. 41,49,161/- as tax deduction at source for the assessment year 2017-18. However, this amount was not credited to the Central Government Account within the stipulated time. 3. Section 276B of the Income Tax Act reads as follows: "276B. Failure to pay tax to the credit of Central government under Chapter XIID or XVIIB.-If a person fails to pay to the credit of the Central Government,--- (a) the tax deducted at source by him as required by or under the provisions of Chapter XVIIB; or (b) the tax payable by him, as required by or under,---- (i) sub-section (2) of section 115-O; or (ii) the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, Section 278B, in the following circumstances only: "278B. Offences by companies.- (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: Provided that nothing contained in this sub- section shall render any such person 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) Notwithstanding anything cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , were in charge of and responsible to the company for the conduct of the business of the company, would be deemed to be guilty of the offence. This would mean that any complaint filed against any officer of the company would require a statement as to how such officer of the company was in charge or responsible for the conduct of the business of the company. Similarly, where the offence has been committed with the consent or connivance or is attributable to any neglect on the part of a Director, the said Director would be liable to be proceeded against. This would mean that the complaint would have to make out a case against such a Director on the lines set out in Section 278B (2) of Income Tax Act. 7. Sri V.V. Anil Kumar, learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble High Court of Delhi with the plea that she had resigned as a Director of the Company even before the issuance of the cheque and had produced Form-32 (which is equivalent to DIR-12 Form under the 2013 Act) to contend that she was not a Director at the time when the cheque was issued. The Hon'ble High Court of Delhi had refused to look into the said Form 32 on various grounds. The Hon'ble Supreme Court accepted the Form-32 produced by the petitioner and had held that such a document was sufficient for the High Court to give relief to the petitioner therein, in a proceeding under section 482 of Cr.P.C. 11. In the present case, the DIR-12 Form produced by the petitioner shows that she had resigned as a Director of the accused No.1 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not have a single averment about any of the persons said to be Directors of the 1st accused Company. In view of the aforesaid Judgments of the Hon'ble Supreme Court, the proceedings against the petitioner in C.C.No.80 of 2019 on the file of the IV Additional District Judge-cum-Special Judge, Economic Offences Court at Visakhapatnam under Section 276B of Income Tax Act, 1961 has to be quashed on both grounds, namely, that the petitioner was not a Director of the company at the relevant point of time and there are no allegations of any nature against the petitioner required under the provisions of Section 278B of the Income Tax Act, to rope the petitioner into the complaint. 15. Accordingly, the criminal petition is allowed quashing the C. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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