KMA LTD Vs. T SUNDARA RAJAN

JUDGEMENT

(1.) THESE two petitions are filed by the petitioners challenging the issue of process in Criminal Case 1912/S/88 on the file of Additional Chief Metropolitan Magistrate, 19th Court, Esplanade, Bombay. Heard both the sides.

(2.) THE first respondent, the Income-Tax Officer, filed a complaint in the Court below against the petitioners in these two cases for an offence under Section 276B read with Section 278B of the Income-Tax Act, 1961. THE complainant's case is that accused No.1 is a Limited Company, accused No.2 was the Managing Director, accused No.3 was the Chairman and accused No.4 was the Secretary of accused No.1 Company, during the relevant year viz. 1975-76. According to the Income-Tax Act and the rules thereunder, the accused were under statutory liability to deduct income-tax out of the dividends to be distributed amongst the shareholders for the year 1973-74. THE accused have failed and neglected to deduct at source an amount of Rs.2,97,045/- without any reasonable cause, out of the dividend amount and thereby they have violated the statutory obligation under Section 200 of the Income-Tax Act read with Rule 30 of the Income-Tax Rules, 1962. THE accused have failed and neglected in deducting the said amount and crediting the same in favour of the Income-Tax Department. Hence it is alleged that the accused have committed the offence mentioned above. THE learned Magistrate has issued the process against the accused for the said offence. Being aggrieved by the order, the accused have filed these two petitions.

(3.) IN the result, both the petitions are allowed. The issue of process and the prosecution of the petitioners in the criminal case mentioned above are hereby quashed. Rule made absolute. Petition allowed.