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TMI Blog2024 (2) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipal Officer . In our considered opinion merely because a person holds an office in a corporate entity would not be sufficient to place that individual in clause (b). The intention of the respondent to treat an individual as the Principal Officer must be based on it being satisfied that the person was connected with the management or administration of the company. While the respondents have referred to additional material in the counter affidavit and which clearly does not find notice or mention in the impugned orders in support of their contention that the petitioner was correctly identified as the Principal Officer , we find that those averments and assertions clearly travel far beyond what was alleged and asserted in the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961 [ Act ]. 2. When the writ petition was originally entertained on 07 August 2019, the Court had passed an interim direction staying the operation of the impugned orders referred to above. The petitioner, thereafter was issued a further communication dated 08 August 2019 holding him to be the Principal Officer . The communication dated 08 August 2019 was stayed by the Court by its order dated 21 August 2019. During the pendency thereof, a subsequent show cause notice also came to be issued on 30 September 2019 under Section 279(1) read with Section 276B(a) of the Act. The Court while considering CM Appl. No. 44757/2019 on 11 October 2019 restrained the respondents from taking further action. It is these interim order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents had illegally treated him to be the Principal Officer . 6. Originally, the order of 20 June 2019 passed by the respondents had proceeded on the basis that no reply had been submitted. However, when it was pointed out that this stand would be factually incorrect, a corrigendum came to be issued on 24 July 2019 and where ultimately the respondents held as follows: - Please refer to the order u/s 2(35) of the I.T. Act, 1961/248 dated 20.06.2019. It has come to the notice of the undersigned that the above order mentioned in para 4 of page no. 1, In response to the show cause nobody appeared and no reply submitted and declared Sh. Varun Sood , to be the Principal Officer within the meaning of sub-section 35 of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of initiation of the proceedings as per the provisions of Section 276B of the IT Act, 1961 against the assessee deductor. 7. As is manifest from a reading of the impugned orders, especially the corrigendum dated 24 July 2019, the respondents appear to have proceeded on the assumption that any person who has been served a notice embodying an intent to treat that person as a Principal Officer would be sufficient for the purposes of Section 2(35) of the Act. 8. It becomes pertinent to note that Section 2(35) is framed in the following terms: - 2. Definitions. In this Act, unless the context otherwise requires, (35) principal officer , used with reference to a local authority or a company or any other public body or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged and asserted in the notices issued originally. 12. It is in the aforesaid backdrop that Mr. Jolly draws our attention to the language employed in Section 2(35)(b) of the Act and Section 141 of the Negotiable Instruments Act, 1881, to contend that while construing pari materia provisions, the Supreme Court has clearly held that for the purposes of an individual being tried, it is mandatory for the respondents to establish that the person was in fact connected with the management and administration of the company. Mr. Jolly sought to draw sustenance for the aforesaid submission from the judgment of the Supreme Court in KPG Nair vs. Jindal Menthol India Ltd. [(2001) 10 SCC 218] wherein the following was observed: 8. From a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information on the basis of which the Key Management Personnel tag is made, has to be explicitly expressed in the notice of the intention of treating any person as a Principal Officer by the AO. Neither in the show-cause notice nor in the order impugned, such connection of the petitioner with the management or administration of the company M/s Kingfisher Airlines Ltd. is established. The phrase Key management personnel of the company has a wide connotation and the same has to be supported with certain material unless such connection is established, no notice served on the petitioner would empower the respondent authority to treat the petitioner as a Principal Officer. 14. In view of the aforesaid, we find ourselves unable to sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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