INCOME TAX OFFICER Vs. JOSEPH

JUDGEMENT

(1.) The Income Tax Officer, A-Ward, Kottayam is the appellant in all these appeals. Complaints were brought against the respondents office bearers of the Ettumanoor Motors (P) Ltd., under S.276(d) and 276-B of the Income Tax Act, 1961 as H amended by Finance Act, 1969 for non payment to the credit of the department all the tax collected on the dividend distributed among the shareholders of the company. C.C. Nos. 107 and 108/69 are the complaints filed. In C.C. 107/69 the complaint was against accused M/s. C.L. Joseph and V. Devassia complaining that their company had declared dividend amounting to Rs.27000/- and odd on 20-12-61 and distributed the same on 1-2-62 after deducting Rs.8217/- from the dividend towards tax under S.18(6) of the Income Tax Act, 1922. Under S.18(6) of the said Act and under S.200 of the Income Tax Act, 1961, the principal officer of the company was bound to pay tax so deducted within 7 days from the date of deduction to the credit of the central government. It was not so remitted. The dividend was distributed on 1-2-62. Under the Act , therefore, the tax had to be credited to the central government on or before 7-2-62. It was averred in the complaint that accused 1 and 2 were the principal officers of the company during the period when the deduction was made. Even though the dividend was distributed as early as on 1-2-62 the tax was paid only on 26-5-69 and as such the accused are liable to be punished under S.276(d) and 276-B of the Income Tax Act, 1961.

(2.) In the connected case C.C. 108/69 the complaint was against 3 of the office bearers (M/s. C.L. Joseph, V. Devassia and V.M. Joseph). It was averred that they had committed offences falling under S.276(d) and 276-B of the Income Tax Act 1961 as amended by the Finance Act, 1969. According to the complainant, the accused were the principal officers of the company during the relevant period. A sum of Rs.3237/- was deducted towards the tax under S.194 of the Income Tax D Act, 1961, but defaulted to pay the same to the credit of the Central Government until 24-5-1969.

(3.) The common question that arises in the two cases were whether the accused were the principal officers of the company during the relevant period and whether the company had distributed dividends and deducted the tax, (Rs. 8217 in one and Rs. 3237/- in the other), and whether they had failed to remit the tax to the credit of the central government within the time specified. The contention of the accused was that they were never the principal officers of the company and that no dividends were distributed and no tax deducted by them. It was also contended in C.C. 107/69 that the offence if at all had been completed long before the 1961 Act had come into force and in such a case the prosecution initiated under the successor Act cannot be sustained. The complainant's answer to this contention was that the offence was a continuing one and so the prosecution brought under the successor Act was valid. The learned District Magistrate upheld the complainant's case and convicted the accused in both the cases and sentenced them to fine. Against the conviction and sentence they preferred appeals to the sessions Judge, Kottayam (Cr. Appeal 61/70 against C.C. 107/69 and Crl. Appeal 62/70 against C.C. 108169). The learned sessions Judge has allowed the appeals and acquitted all the accused. It is from the order of acquittal that the present appeals - Appeal 43 and 44/70 - have been preferred.