1983 TAX. L. R. 1432 ::(1983) MadLW(Cri) 191 ::1983 TLNJ 276

Madras High Court

Hon'ble Judge(s): Natarajan , J

Income-tax Act (43 of 1961) , S.2 (35)(b), S.276-B— Prosecution of Managing Director of Company under S. 276B for delayed payment of tax - Service of notice to treat him as Principal Officer under S. 2 (35) (b) is condition precedent. When no notice as contemplated under S. 2 (35) (b) has been served on the Managing Director of a company, informing him of the intention of I.T.O. to treat him as the Principal Officer, he could not be prosecuted under S. 276B for delayed payment of the tax amount by the company.(Para 10 11) Under Sub-cl. (a) of S. 2 (35), the Secretary, Treasurer, Manager or Agent will automatically constitute a "Principal Officer". In their absence, it is open to the ITO to treat anyone else as a 'Principal Officer' of the Company, provided he gives a notice to the person concerned of his intention of treating him as the Principal Officer of the Company. To enable the ITO to do so, sub-sec, (b) has been enacted. The re-sultant position would, therefore, be that if anyone who is connected with the company is not the Secretary, Treasurer. Manager or Agent then he cannot be treated as the Principal Officer of the Company unless the ITO has served a notice as envisaged under S. 2 (35) (b). (Para 9) .....