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Heard learned counsel for the parties.

2. By this petition, the assessee challenges the authorisation issued by the Commissioner on 20-1-1992, to include the name of the petitioner who was then an accountant engaged in Jodhpur Woollen Mills in the order under section 279(1) for the assessment year 1982-83 passed by his predecessor in the office on 13-3-1991, for prosecuting the petitioner under section 276B of the Income Tax Act, 1961.

3. The petitioner is an officer of a company known as Jodhpur Woollen Mills Ltd. The facts of the case as emerge from the record of this case are that by communication dated 3-8-1989, the then Commissioner, Jodhpur issued a notice to the company to show cause against proposal to launch prosecution under section 276B of the Income Tax Act for the assessment years 1982-83 to 1985-86. After receiving the reply of the company, the Commissioner vide his order dated 13-3-1991, sanctioned the prosecution of the company and its two joint managing directors and two directors named in the order to be prosecuted under section 276B and directed the Dy. Commissioner (Asst) to file a complaint in the court of Special Judge for Economic Offences. In furtherance of this order issued under section 279(1) of the Income Tax Act, 1961, the successor-in- office of the then Commissioner, authorised inclusion of the name of the petitioner also in the order dated 13-3-1991, for being prosecuted under section 276B of the Income Tax Act, 1961, for the alleged default for the assessment year 1982-83. As it would be relevant for the purpose of the present case, the two orders are produced hereinbelow :

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.

By the Taxation Laws (Amendment and Misc. Provisions) Act, 1986, which came with effect from 10-9-1986, the words "without reasonable cause or excuse" were omitted from section 276B.

Then existing section 276B was substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1-4-1989, and reads as under :

"Section 276 B. 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."

Thus, the absence of reasonable cause for such failure became an essential ingredient of the guilt of the accused. It may be noticed that when the alleged offence was committed in 1982-83, the expression "failure without reasonable cause or excuse" was essential ingredient of section 276B and this essential ingredient again came into existence by insertion of section 276B in section 278AA with effect from 1-4-1989, which provision was in force when the impugned sanction was granted. Therefore, if the provisions of section 276B read as on the date the offence was committed or read as on the date when sanction was granted along with section 278AA, absence of reasonable cause or excuse on the part of the assessee became an essential ingredient of the offence for which he could be punished. Notwithstanding shift of burden of proof, if the material available on record about such sufficient and reasonable cause for the default is already on record as a part of finding in proceedings under section 201, the same becomes integral part of record to be considered before sanction could have been issued.

21. Like view was expressed by Patna High Court in Banwarilal Satyanarain v. State of Bihar (1989) 179 ITR 387 (Pat) In that case, the question that arose before the court was "whether, in a penalty proceeding, where an authority under the Act who has expert knowledge of the subject has recorded a finding that the assessee had furnished good and sufficient reasons for failure to deduct and/or pay the tax within time, and dropped the penalty proceedings or deleted the same, as the case may be, can it be said that he is still liable to be prosecuted under section 276B of the Act The question was answered in negative by the Patna High Court. It observed "Now, it has to be seen as to what is the effect of the amendment. Can it be said that, after the amendment, the question whether an accused had any reasonable cause or not for not deducting and paying tax within time is only of academic importance and not relevant for a criminal court ? My answer is emphatically in the negative. Section 278AA is nothing else but a proviso to section 276B of the Act, but a separate section has been inserted in the Act, as similar provisions have been made with respect to prosecution under sections 276A, 276AB, 276DD and 276E. The cumulative effect of the amendment, in my view, is that in a case of prosecution under section 276B of the Act, two things have to be shown-, first, that there was failure on the part of the assessee in deducting or paying the tax within time and, secondly, that the failure was without any reasonable cause."