BANWARILAL SATYANARAIN Vs. STATE OF BIHAR

JUDGEMENT

(1.) THIS application has been filed on behalf of the petitioners for setting aside the impugned order dated June 15, 1986, passed in trial No. 6 of 1986, before the Presiding Officer, Special Court, for trial of cases relating to economic offences (hereinafter referred to as the "Special Court") by which he has refused to discharge the petitioners from the charge under Section 276B of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), as well as for quashing of the prosecution of the petitioners in the aforesaid case.

(2.) NECESSARY facts giving rise to criminal prosecution of the petitioners are that petitioner No. 1 is a partnership firm registered as such under the Act and petitioners Nos. 2 to 5 are its partners. In the course of the assessment proceeding for the assessment year 1977-78, it transpired that the accused persons did not deduct income-tax under Section 194A of the Act in time and the same resulted in non-payment of tax within the prescribed time to the credit of the Central Government. The amount of interest payable to seven different persons by the petitioner-firm (hereinafter referred to as "the assessee") was credited to their respective accounts on March 29, 1977, but the income-tax thereon was deducted only on July 29, 1977, and the same was paid to the credit of the Central Government on August 1, 1977, whereby two months' default was committed by the asses-see in payment of the income-tax deducted or to be deducted at source (hereinafter referred to as the T. D. S.).

(3.) SECTION 201(1) of the Act lays down that if any such person does not deduct or after deducting fails to pay the tax as required under SECTION 194A and other provisions of the Act referred to above, he or it shall be deemed to be an assessee in default in respect of the tax. Under SECTION 201 (1A) of the Act, such a person shall be liable to pay simple interest at the rate of 15 per cent. per annum on the amount of such tax from the date on which the same was deductible to the date on which the same is actually paid.