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Heard the petitioner's counsel and the counsel appearing for the respondent.

2. This revision petition is filed challenging the order dated 01.10.2019 passed by the Special Court for Economic Offences, Bengaluru, (henceforth referred to as 'the Trial Court') discharging accused No.2 in C.C. No.77/2018.

3. The factual matrix of the case of the revision petitioner before the Trial Court are that the complainant / Income Tax Department by its Assistant Commissioner of Income Tax, TDS Circle-3(1) filed the complaint under Section 200 of the Code of Criminal Procedure, 1973 (for short, 'Cr.P.C') alleging that accused No.1 - Company and other accused had not remitted the deducted Tax Deducted at Source (TDS) of Rs.4,84,69,841/- pertaining to the financial year 2013-14 and thereby, committed an offence punishable under NC: 2025:KHC:4782 Section 276B of the Income Tax Act, 1961 (hereinafter called as 'the Act').

7. Learned counsel also brought to the notice of this Court the proviso under Section 276B of the Act wherein liability to be fixed if the offences are invoked against the respondent herein. Failure to pay the tax collected at source to the credit of Central Government. The counsel referring to Section 276B as well as Section 278B of the Act would contend that where an offence under this Act has been committed by a

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NC: 2025:KHC:4782 Company, every persons who is in helm of affairs at the time of the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. When such provision is very clear that the officer in the helm of the affairs of the Company committed default in making payment of the amount when specific allegations also made in the complaint that they were in the helm of affairs of the Company ought not to have been discharged from the offences invoked against them. Counsel in support of this argument, relied upon the judgment of the Hon'ble Apex Court in MADHUMILAN SYNTEX LTD. & ORS. v. UNION OF INDIA & ANR. reported in [(2007) 290 ITR 0199] and brought to the notice of this Court paragraph No.13 of the judgment, where discussion was made with regard to Section 276B of the Act - Failure to pay the tax deducted at source and also discussion was made with regard to Section 278B - Offences by Companies and also discussion made in paragraph No.14: "it is clear that wherever a company is required to deduct tax at source and to pay it to the account of

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NC: 2025:KHC:4782 with Section 278B of the Act to prosecute them. It is important to note that this Court has to take note of the relevant provisions of Section 276B read with Section 278B of the Act. This Court would like to rely upon the proviso to Section 276 B which reads as follows:

"Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B. 276B. If a person fails to pay to the credit of the Central Government,--

13. Having referred to Sections 276B and 278B of the Act and referring to paragraph No.13 of the judgment in the case of Madhumilan Syntex Ltd., (supra), where the Apex Court also in detail discussed the Chapter XXII which relates to offences and prosecution and Section 276B deals with "Failure to pay tax". The Section at the relevant time is as under:

"276B. Failure to pay the tax deducted at source.-- If a person fails to pay to the credit of the Central Government, the tax deducted at source by him as required by or under the provisions of Chapter XVII-B he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine."