Law:

Section:

Section 276B of the Income-tax Act, 1961 - Offences and prosecution - Failure to pay tax deducted at source - Assessee-company filed a writ for setting aside decision of authorised officer to initiate prosecution proceedings against it under section 276B - Whether as assessee could not convince that even if allegations made by authorised officer were all true, those facts did not constitute any offence under section 276B, there was no scope for pre-empting said proceedings by entertaining writ - Held, yes FACTS The authorised officer issued a show-cause notice to the assessee-company for explaining as to why prosecution, under section 276B proceedings for failure on its part to pay to the credit of the Central Government, the tax deducted at source as required under the provisions of Chapter XVII-B, should not be initiated. The assessee-company filed a writ petition for setting aside the decision to initiate prosecution proceedings against it under section 276B. HELD In a given case whether there is just and sufficient reason for not depositing the tax deducted at source is always a question of fact depending upon appreciation of evidence produced before the Court. The pleas raised by the assessee would all be available to it in the criminal trial and if it could establish that those were sufficient, the criminal prosecution would fail. But at the instant stage, there was no scope for pre-empting the said criminal proceedings by entertaining the instant writ application. The position, however, would have been different if the assessee could convince the Court that even if the allegations made by the authorised officer were true, those facts did not constitute any offence under section 276B. [Para 7] The writ application was, thus, to be dismissed. [Para 9] JUDGMENT 1. By this writ application the writ petitioner has prayed for setting aside the decision to initiate prosecution against the petitioner under section 276B of the Income-tax Act, 1961, for the financial years mentioned in the prayer portion of this writ application. 2. There is no dispute that in the past the respondents authority issued a show-cause notice upon the petitioner for explaining why…

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