A company cannot be prosecuted under Section 276-B of the Income-tax Act, 1961, as it is a juristic person and cannot be imprisoned. However, the prosecution of the director and the secretary can proceed as they were responsible for paying salaries and deducting income tax.

( 1 ) A complaint under Section 276-B of the Income-tax Act, 1961 was filed in the Court of the City Magistrate, Kanpur by Sri S. K. Bhatnagar. Income-tax Officer, Salary Circle, Special Ward. Kanpur against:

1. M/s. Laxmi Ratan Cotton Mills Company Ltd. . Kanpur through Sri Ram Gopal Gupta, Director, Behari Niwas. Kanpur.

2. Ram Prasad Gupta son of L. Behari Lal Gupta Director and Principal Officer of M/s. Laxmi Ratan Cotton Mills Co. Ltd. , Kalpi Road, Kanpur.

3. K. N. Agarwal. Secretary and Principal Officer, Laxmi Ratan Cotton Mills Company Ltd. , Kanpur. 1. It was alleged in the complaint that under the provisions of Section 192 (1) of the Income-tax Act, 1961 any person responsible for paving any income chargeable under the head salaries shall at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made on the estimated income of the assessee under this Act for that financial year. The complaint case is that it was the duty of the accused Nos. 1, 2 and 3 to have deposited to the credit of the Central Government the sum So deducted as income-tax under Section 192 (1) of the Income-tax Act within one week of the date of such deduction, or the date of the receipt of the Ohalan, as provided for in Rule 30 (3) of the Income-tax Rules, 1962. The tax deducted at source from the salaries of the employees of the company for the period 16-9-1969 to 15-11-1969 was Paid to the credit of the Central Government on 9-1-1970 and the tax deducted for the period 16-11-1969 to 15-12-1969 was paid to the credit of the Central Government on 15-11-1970. This tax should have been paid by the accused within a week from the date of the deduction which has not been done. The accused did not show any reasonable cause or excuse for the late payment of the deducted tax. No request for challan was made to the Income-tax Officer by the accused Nos. 1 to 3 as required under Rule 30 (3) of the Income-tax Rules, 1967. In short, the complaint case was that the accused had failed without reasonable cause or excuse to pay the income-tax deducted at source within the prescribed time as required under the provisions contained in Chapter XVIII of the Income-tax Act, 1961. In these circumstances it was alleged that the accused had committed an offence punishable under Section 276-B of the Income-tax Act. 1961.

( 2 ) ON receipt of summonses the accused put in appearance before the Court. An application was filed on their behalf on 26th May, 1972 praying that any two out of the above three accused may be discharged. It was alleged in this objection that either the company or the Principal Officer can be held responsible, for the breaches contemplated by Section 276-B of the Income-tax Act. The prosecution should have come forward with a definite case as to who is responsible for deducting tax and payment of salaries. This not having been done the prosecution was value and evasive.

( 3 ) THE City Magistrate, Kanpur rejected the prayer of the opposite parties vide his order dated 26th May. 1972. It was observed by the City Magistrate that under Section 204 (1) of the Income-tax Act the person responsible for payment for purposes of Section 192 is the company itself including the Principal Officer thereof. The question as to who is the Principal Officer and whether there can be more than one Principal Officer is a Question depending on evidence to be produced by the complainant and the accused. The City Magistrate was of the view that this was too premature stage for raising this objection.

( 4 ) AGGRIEVED thereby a revision was filed before the Additional District Magistrate (Judicial) Kanpur, who has made the present recommendation to this Court for setting aside the order of the City Magistrate dated 26th May 1970.

( 5 ) I have heard learned Counsel for the parties in support of their respective submissions. Section