Law:

Section:

Section 276B of the Income-tax Act, 1961 - Prosecution - For failure to pay tax deducted at source - Whether section 276B attracted to delayed payment of tax deducted at source - Held, yes - Whether words "failure to pay" in section 276B would apply to case of "refusal" or "failure" to pay only - Held, no - Whether section 276B would not apply to "company" and its "principal officer" - Held, no FACTS The petitioner-company had deducted at source, under section 192, tax from taxable salary of its employees but, without reasonable cause or excuse, paid the same to the credit of the Central Government after a delay of 61 days or more which clearly violated the provisions of section 200, read with rule 30 of the Income-tax Rules, 1962. For this default by the company and its principal officer, criminal complaints were launched under section 276B against them. In petition under section 482 of the Code of Criminal Procedure, the petitioners contended, inter alia, that (i) the words "failure to pay" in section 276B should be construed in a manner harmonious with the provisions contained in other sections, viz., sections 221, 271, 276C and 276D, and section 276B would apply only to a case of refusal or total failure to pay and not to a case of delayed payment made before the notice imposing penalty was issued or prosecution was launched ; (ii) "delayed payment", without reasonable cause or excuse, will only attract levy of simple interest at 12 per cent per annum under section 201(1A) and even after treating the assessee in default, the department can either levy penalty under section 221 or launched prosecution under section 276B; ( iii) to commit an offence under section 276B, there must be a mens rea or guilty mind which situation can never exist in a case of belated payment; (iv) section 276B cannot be applied in relation to a company since the company, which is a judicial person, cannot be punished with imprisonment and the statute gives no discretion to the court to award partial punishment; and (v) section 276B cannot apply to the "principal officer" of a company as the phrase "principal officer" or "person responsible to pay" has been omitted in section 276B…

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