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TMI Blog1983 (7) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... nst M/s. Rayala Corporation Pvt. Ltd. (accused No. 1) and its managing director, Sri M. R. Pratap (accused No. 2), for non-payment within the prescribed time of income-tax deducted from the salaries of the employees of the company. The case was taken on file against the two accused under s. 276B read with s. 200 of the I.T. Act, 1961 (hereinafter referred as " the Act "), and rule 30 of the I.T. Rules, 1962 (hereinafter referred to as " the Rules "), and process was issued to the accused. After receipt of process, the two accused filed Crl. M.P. No. 25 of 1976 on the file of this court and prayed for quashing of the proceedings against them. Various contentions were raised by them such as that only total non-payment of tax deductions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice as contemplated in section 2(35)(b) and treated as the 'principal officer', then notwithstanding the fact that he is the managing director, he can be treated as the 'principal officer'. Similarly, notwithstanding the fact that he is not actually the person making deductions of income-tax from the salaries paid to the employees, he will still constitute a person responsible for paying. In that view of the matter, the 2nd contention of the petitioners has also to fail. It is not the petitioners' case that the 2nd petitioner has not been issued notice by the Income-tax Officer and treated as the principal officer of the company. The situation may, however, be different if such a notice had not been given to the 2nd petitioner. But th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the petitioner, but the admitted stand of the complainant also that the ITO has not issued any notice to the petitioner informing him of his intention to treat the petitioner as the principal officer of the company. His further argument is that the decision in M. R. Pratap v. V. M. Muthukrishnan, ITO [1977] 110 ITR 655 (Mad), will have no application to the facts of this case, because s. 276B and s. 277 of the Act stand on different footings. Arguing contra, the learned, counsel for the Income-tax Department states that the petitioner will undoubtedly constitute the principal officer of the company, in view of his position as managing director and, therefore, he can also be proceeded with under s. 276B for delayed payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s' rigorous imprisonment and fine, and, in any event, it, shall be for a minimum period of three months. . Coming now to the interpretation of s. 276B, the section does not refer to the managing director or director or the principal officer, etc. It merely refers to a person. The word " person " has been defined in s. 2(31) as follows : "2. (31) 'person' includes (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses ". The definition contained in s. 2(31) is not helpful for deciding the controversy on hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of the petitioner that he is not the principal officer and as such, he cannot be prosecuted for an offence under s. 276B. Then we come to s. 192, which provides for deduction of tax at source. Sub-s. (1) of s. 192 reads as follows : " 192. (1) Any person responsible for paying any income chargeable under the head 'Salaries' shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year ". There is reference here also to a person responsible for paying any income chargeable under the head " Salaries ". But, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner's case that the 2nd petitioner has not been issued notice by the Income-tax Officer and treated as the principal officer of the company. The situation may, however, be different if such a notice had not been given to the 2nd petitioner. But that is a matter to be gone into by the trial court because it involves taking of evidence. The petitioner has now come forward with this petition saying that the Department has not served any notice on him under s. 2(35)(b) and this fact is not disputed by the Department itself. In such circumstances, the contention of the petitioner has to be accepted. So far as the decision in M. R. Pratap V. V. M. Muthukrishnan, ITO [1977] 110 ITR 655 (Mad), is concerned, the ratio laid down therein will not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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