PATHAK, J. (Oral)

1. By the above petitions, petitioner seeks leave to appeal against the judgment dated 8th September, 2009 passed by Additional Chief Metropolitan Magistrate (ACMM), Delhi whereby respondent no. 3 i.e. director of the respondent no.1, has been acquitted of the offence under Section 276-B of the Income Tax Act, 1961 (for short hereinafter referred to as “the Act”).

2. These petitions are disposed of together as not only the parties but the facts and the questions of law involved therein are same.

3. Briefly stated, facts of the case are that the petitioner had filed complaints before the ACMM praying therein that the respondent be summoned, tried and punished under Section 276-B of the Act. It was alleged that the respondent no. 1 was a private limited company; while respondent No. 3 was its Director and “Principal Officer” and was responsible for managing the day-to-day affairs of the company. Respondents had failed to deduct the tax at source (TDS) from the interest paid to M/s Bhanamal & Co. (P) Ltd., M/s Banwari Lal & Sons (P) Ltd. and M/s Bhanamal Gulzari Mal (P) Ltd., and deposit the same with the Income Tax Department, within the prescribed period, thus, had committed offence punishable under Section 276-B of the Act. Respondent no. 3 was impleaded as an accused being “principal officer” of the company within the meaning of Section 2(35) of the Act.

4. Charge under Section 276-B IPC was framed against the respondents to which they pleaded not guilty and claimed trial.

5. After holding trial, while respondent no. 1 was convicted under Section 276-B of the Act, respondent no. 3 has been acquitted on the ground that no notice was served on him under Section 2(35) of the Act treating him as “principal officer”, before launching the prosecution under Section 276-B of the Act, inasmuch as, the notice issued to the company was defective in the sense it was not mentioned therein, that the department intended to treat the directors of the company as “principal officers”. Respondent no. 3 has been acquitted for the non compliance of Section 2(35) of the Act.

6. For the discussions made hereinafter, I do not find the view taken by ACMM to be perverse or suffering from any manifest error, necessitating the grant of leave to appeal to petitioner.

7. Section 194-A of the Act mandates the deduction of tax at source on the credit or payment of interest other than “interest on securities”. Section 194-A (4) uses the expression “the person responsible for making the payment”. Section 204 of the Act defines the expression “person responsible for paying”. Relevant would it be to refer to Section 204 of the Act, which reads as under :- “Section 204: Meaning of "Person responsible for paying"-

For the purposes of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J and section 194K, 194L sections 195 to 203 and section 285, the expression "person responsible for paying" means – (i) In the case of payment of income chargeable under the head "Salaries" other than payments by the Central Government or the Government of a State, the employer himself or, if the employer is a company, the company itself, including the principal officer thereof; (ii) In the case of payments of income chargeable under the head "Interest on securities" other than payments made by or on behalf of the Central Government or the Government of a State, the local authority, corporation or company, including the principal officer thereof; (iia) In the case of any sum payable to a non-resident Indian, being any sum representing consideration for the transfer by him of any foreign exchange asset, which is not a short-term capital asset, the authorised dealer responsible for remitting such sum to the non-resident Indian or for crediting such sum to his Non-resident (External) Account maintained