{"id":4873,"date":"2018-01-29T17:21:30","date_gmt":"2018-01-29T11:51:30","guid":{"rendered":"http:\/\/www.itatonline.org\/articles_new\/?p=4873"},"modified":"2018-02-16T14:10:17","modified_gmt":"2018-02-16T08:40:17","slug":"law-on-offenses-by-companies-and-prosecution-of-directors","status":"publish","type":"post","link":"https:\/\/itatonline.org\/articles_new\/law-on-offenses-by-companies-and-prosecution-of-directors\/","title":{"rendered":"Law On Offenses By Companies And Prosecution Of Directors"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.itatonline.org\/articles_new\/wp-content\/uploads\/Rahul-Hakani.jpg\" alt=\"\" width=\"76\" height=\"100\" class=\"alignleft size-full wp-image-3159\" \/><\/p>\n<p><strong>Section 278B of the Income-tax Act imposes draconian consequences of prosecution upon directors for offenses committed by the Company. Advocate Rahul K. Hakani has explained the nature and scope of liability and also drawn attention to all the important judgements on the subject<\/strong><\/p>\n<h2>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Introduction <\/h2>\n<p>Numerous occasions arise when it is alleged that an offence under any  Act is committed by a company and prosecution is invariably sought to be  launched against the company, its directors and some of its executives. As  &quot;Company&quot; is an artificial person created by law, and is capable of  acting only through human agency occupying the position of directors and  executives, it is but natural that all such persons are charged for the  offence. <\/p>\n<p><!--more--><\/p>\n<p>The provisions regarding the liability of the directors and other  persons for offences committed by the company are enumerated under various Acts  such as Industries (Development and Regulation) Act, Foreign Exchange  Regulation Act; MRTP Act, Securities Contracts (Regulations) Act; Essential  Commodities Act, Employees&#8217; Provident Fund and Misc. Provisions Act, Workmen&#8217;s  Compensation Act, Payment of Bonus Act, Payment of Wages Act, The Environment  (Protection) Act, Water (Prevention and control of Pollution) Act, Minimum  Wages Act; Payment of Gratuity Act, Apprentices Act, Central Excise and Salt  Act, Customs Act, 1961, Negotiable Instruments Act etc. etc. and the  pro-visions are somewhat identical in nature. Hence, when the provisions <em>qua<\/em> the directors&#8217; liability are considered under the Income-tax Act, 1961, it is  also pertinent to note the law as laid down under other Acts by the Courts. <\/p>\n<h2>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions of Section 278B<\/h2>\n<p>As per sub-section (1) of section 278B, where an offence under this Act  has been committed by a company, every person who, at the time 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. The proviso to sub-section (1) provides that nothing  contained in this sub-section shall render any such person liable to any  punishment if he proves that the offence was committed without his knowledge or  that he had exercised all due diligence to prevent the commission of such  offence. <\/p>\n<p>Sub-section (2) provides that notwithstanding anything contained in  sub-section (1), where an offence under this Act has been committed by a  company and it is proved that the offence has been committed with the consent  or connivance of, or is attributable to any neglect on the part of, any  director, manager, secretary or other officer of the company, such director,  manager, secretary or other officer shall also be deemed to be guilty of that  offence and shall be liable to be proceeded against and punished accordingly.<\/p>\n<p>As per sub-section (3) where an offence under this Act has been  committed by a person, being a company, and the punishment for such offence is  imprisonment and fine, then, without prejudice to the provisions contained in  sub-section (1) or sub-section (2), such company shall be punished with fine  and every person, referred to in sub-section (1), or the director, manager,  secretary or other officer of the company referred to in sub-section (2), shall  be liable to be proceeded against and punished in accordance with the  provisions of this Act. The Explanation to section 278B provides that for the  purposes of section 278B &mdash; (a) &quot;company&quot; means a body corporate, and  includes &mdash; (i) a firm and (ii) an association of persons or a body of  individuals whether incorporated or not and (b) &quot;director&quot;, in  relation to &mdash; (i) a firm, means a partner in the firm (ii) any association of  persons or a body of individuals, means any member controlling the affairs  thereof.<\/p>\n<p><iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/vfEKHaUv9ZU\" frameborder=\"0\" allow=\"autoplay; encrypted-media\" allowfullscreen><\/iframe><\/p>\n<h2>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legislative  history and analysis of the Section<\/h2>\n<p>Section 278B was inserted by the Taxation Laws (Amendment) Act, 1975  reported in (1975) 100 ITR 33 (ST) w.e.f. 1-10-1975. The object and scope of this section was  explained by the Board in its Circular No. 179 dated 30-9-1975 reported in (1976) 102 ITR 26 (ST).<\/p>\n<p>Under sub-section (1) the essential ingredient for implicating a person  is his being &ldquo;in-charge of&rdquo; and &quot;responsible to&quot; the company for the  conduct of the business of the company. The term responsible is defined in the  Black&#8217;s Law dictionary to mean accountable. Hence, the initial burden is on the  prosecution to prove that the accused persons at the time when the offence was  committed were &ldquo;in charge of&rdquo; and &ldquo;was responsible&rdquo; to the company for its  business and only when the same is proved that the accused persons are required  to prove that the offence was committed without his knowledge or that he had  exercised all due diligence to prevent the commission of such offence. <\/p>\n<p>Both the ingredients &ldquo;in-charge of&rdquo; and &quot;was responsible to&quot;  have to be satisfied as the word used is &ldquo;and&rdquo; <em>[Subramanyam v. ITO (1993)  199 ITR 723 (Mad.)].<\/em> Under sub-section (2) emphasis is on the holding of an  offence and consent, connivance or negligence of such officer irrespective of  his being or not being actually in charge of and responsible to the company in  the conduct of the business. Also, while all the persons under sub-section (1)  and sub-section (2) are liable to be proceeded against it is only persons  covered under sub-section (1) who by virtue of the proviso escape punishment if  he proves that the offence was committed without his knowledge or despite his  due-diligence. From the language of both the sub-sections it is also clear that  the complaint must allege that the accused persons were responsible to the  firm\/company for the conduct of its business at the time of the alleged  commission of the business to sustain their prosecution.<em> [Jai Gopal Mehra v.  ITO (1986) 161 ITR 453 (P&amp;H)]. <\/em><\/p>\n<p>Insertion of sub-section (3) by the Finance (No.) Act, 2004 w.e.f.  1-10-2004 was explained by Circular No. 5 dated 15th July, 2005 reported in  (2005) 276 ITR 151 (ST). The said amendment was brought to resolve a judicial  controversy as to whether a company, being a juristic person, can be punished  with imprisonment where the statute refers to punishment of imprisonment and  fine. The Apex Court in <em>Javali (M.V.) v. Mahajan Borewell and Co. (1998) 230  ITR 1 <\/em>held that a company which cannot be punished with imprisonment can be  punished with fine only. However, in a subsequent decision by majority in the  case of <em>ACIT<\/em><em> v. Veliappa Textiles Ltd. (2003) 263 ITR 550 (SC) <\/em>it was held that where punishment  is by way of imprisonment then prosecution against the company would fail. In  order to plug loopholes pointed by the Apex Court in Veliappa Textiles (supra)  sub-section (3) was introduced whereby company would be punished with fine and  other person in-charge of or conniving officers of the company would be  punished with imprisonment and fine. It is also to be noted that the legal  position laid down in the case of Veliappa Textiles (supra) was overruled by  the Apex Court decision rendered in <em>Standard Chartered Bank v. Directorate  of Enforcement (2005) 275 ITR 81 (SC). <\/em><\/p>\n<h2>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Nature of liability <\/h2>\n<p>The principal liability under section 278B is that of the company. The  other persons mentioned in sub-section(1) and sub-section (2) are vicariously  liable i.e., they could be held liable only if it is proved that the company is  guilty of the offence alleged. <\/p>\n<p>The Apex    Court in <em>Sheoratan Agarwal v. State of <\/em><em>Madhya Pradesh AIR<\/em><em> 1984 S.C. 1824<\/em> while dealing with the provisions of section 10 of the Essential  Commodities Act which are similar to section 278B has held that the company  alone may be prosecuted. The person-in-charge only may be prosecuted. The  conniving officer may individually be prosecuted.<br \/>\n  The Apex Court in <em>Anil Hada v. Indian Acrylic Ltd. A.I.R 2000 S.C.  145<\/em> while dealing with section 141 of the Negotiable Instruments Act held  that where Company is not prosecuted but only persons in-charge or conniving  officer are prosecuted then such prosecution is valid provided the prosecution  proves that the company was guilty of the offence.<\/p>\n<h2>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Strict Construction<\/h2>\n<p>The Supreme Court in the case of <em>Girdharilal Gupta v. D. N. Mehta,  AIR 1971 S.C. 2162, <\/em>has held that since the provision makes a person who  was in charge of and responsible to the company for the conduct of its business  vicariously liable for an offence committed by the company. The provision  should be strictly construed.<\/p>\n<h2>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mens rea<\/h2>\n<p>Section 278B is a deeming provision and hence it does not require the  prosecution to establish <em>mens rea<\/em> on the part of the accused. In <em>B.  Mohan Krishna v. UOI 1996 Cri.L.J&nbsp; 638 AP<\/em> it is held that exclusion of <em>mens rea<\/em> as a necessary ingredient of an  offence is not violative of Article 14 of the Constitution of India.<\/p>\n<h2>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proprietary concern<\/h2>\n<p>In <em>S. K. Real Estates (2002) Cr.L.J. 1689 (<\/em><em>Mad.<\/em><em>)<\/em> it  was held that prosecution against a proprietary concern is not maintainable as  it is not a legal entity or juridical person. <\/p>\n<h2>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Society<\/h2>\n<p>In <em>Dharma Pratisthan v. Mandal (1988) 173 ITR 487 (<\/em><em>Del.<\/em><em>)<\/em> it  is held that a Society being a AOP and its members can be prosecuted. <\/p>\n<h2>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liability of  Directors, Managing Directors, Manager, Partners, etc.<\/h2>\n<p>From the analysis of the provisions of section 278B, it could be seen  that the scope and the exact connotation of the expression &quot;every person  who at the time the offence was committed was in-charge of, and was responsible  to, the company for the conduct of business of the company&quot; assumes a very  important role. If a person i.e. the director or an executive of the company  falls within the purview of this expression, he would be liable for the offence  of the company, and may be punished therefor. If, on the other hand, the person  charged with an offence is not the one who falls within the ambit of that  expression, the Court will relieve him of the accusation. Therefore, the  essential question that arises is as to who are the persons in-charge of, and  responsible to, the company for the conduct of the business of the company. It  should be noted that the onus of proving that the person accused was in-charge  of the conduct of the business of the company at the time the contravention  took place lies on the prosecution.<\/p>\n<p>In Girdhari Lai Gupta&#8217;s case (Supra), the Supreme Court construed the  expression, &#8216;person in-charge and responsible for the conduct of the business  of the company&#8217; as meaning the person in overall control of the day-to-day  business of the company. In arriving at this inference the Supreme Court took  into consideration the wordings pertaining to sub-section (2) and observed:\n  <\/p>\n<p>&quot;It mentions director, who may be a party to the policy being  followed, by a company and yet not be in-charge of the business of the company.  Further, it mentions manager who usually is in-charge of the business but not  in over-all-charge. Similarly the other officers may be in charge of only some  part of business&quot;.<\/p>\n<h2>10.&nbsp;&nbsp;&nbsp; Firm and partners <\/h2>\n<p>The Apex Court in <em>State of <\/em><em>Karnataka<\/em><em> v. Pratap Chand &amp; Ors. (1981) 2 SCC 335<\/em> has while dealing with prosecution of partners of  a firm held that &lsquo;person in-charge&rsquo; would mean a person in overall control of  day-to-day business. A person who is not in overall control of such business  cannot be held liable and convicted for the act of firm. In <em>Monaben  Ketanbhai Shah &amp; Anr. v. State of Gujarat &amp; Ors. (2004) 7 SCC 15 (SC)<\/em> the Apex Court while dealing with the provisions of sections 138 and 141 of the  Negotiable Instruments Act, 1881, it was observed that when a complaint is  filed against a firm, it must be alleged in the complaint that the partners  were in active business. Filing of the partnership deed would be of no  consequence for determining the question. Criminal liability can be fastened  only on those who at the time of commission of offence were in-charge of and  responsible for the conduct of business of the firm. The Court proceeded to  observe that it was because of the fact that there may be sleeping partners who  were not required to take any part in the business of the firm; there may be  ladies and others who may not be knowing anything about such business. The  primary responsibility is on the complainant to make necessary averments in the  complaint so as to make the accused vicariously liable. In <em>Krishna Pipe and  Tubes v. UOI (1998) 99 Taxman 568 (All.)<\/em> it was held that sleeping partners  cannot be held liable for offence. <\/p>\n<h2>11.&nbsp;&nbsp;&nbsp; Manager <\/h2>\n<p>In <em>Municipal  Corporation of <\/em><em>Delhi<\/em><em> v. Ram Kishan Rohtagi &amp; Ors. AIR 1983 SC 67,<\/em> the accused invoked the jurisdiction of the High  Court under section 482 of the Code praying for quashing of criminal  proceedings initiated against them under the Prevention of Food Adulteration  Act, 1947. Whereas accused No. 1 was manager of the company, accused Nos. 2-5  were directors. A complaint was led by the Food Inspector of the Municipal  Corporation,<em> inter alia<\/em>, alleging that &lsquo;Morton Toffees&rsquo; sold by the  accused did not conform to the standards prescribed for the commodity. The  Metropolitan Magistrate issued summons to all the accused for violating the  provisions of the Act. It was contended on behalf of the accused that  proceedings were liable to be quashed as it was not shown that accused persons  were in-charge of and responsible for the conduct of business. The High Court  allowed the petition and quashed the proceedings. Aggrieved Municipal  Corporation challenged the decision. The Apex Court held that so far as the  manager is concerned, we are satisfied that from the very nature of his duties  it can be safely inferred that he would undoubtedly be vicariously liable for  the offence, vicarious liability being an incident of an offence under the Act.<\/p>\n<h2>12.&nbsp;&nbsp;&nbsp; Company and Directors etc.<\/h2>\n<p>In <em>Jamshedpur<\/em><em> Engineering &amp; Machine Manufacturing Co. Ltd.  &amp; Ors. v. <\/em><em>Union<\/em><em> of India &amp; Ors. (1995) 214 ITR 556 (Pat.)<\/em>, the High Court of Patna (Ranchi Bench) held that no vicarious liability  can be fastened on all directors of a company. If there are no averments in the  complaint that any director was &lsquo;in-charge of&rsquo; or &lsquo;responsible for&rsquo; conduct of  business, prosecution against those directors cannot be sustained. <\/p>\n<p>In <em>R. K. Khandelwal  v. State [(1965) 2 Cri. L.J. 439 (AH)] <\/em>while dealing with liability of  non-working directors it has been very succinctly stated by Mathur J. as under:<br \/>\n  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br \/>\n  &quot;In companies there  can be directors who are not in charge of, and responsible to the company for  the conduct of the business of the company. There can be directors who merely  lay down the policy and are not concerned with the day-to-day working of the  company. Consequently, the mere fact that the accused person is a director of  the company, shall not make him criminally liable for the offences committed by  the company unless the other ingredients are established which make him  criminally liable. To put it differently, no director of a company can be  convicted of the offence under section 27 of the Act [The Drugs Act, 1940]  unless it is proved that the sub-standard drug was sold with his consent or  connivance or was attributable to any neglect on his part, or it is proved that  he was a person in-charge of, and responsible to the company for the conduct of  the business of the company.&quot;<\/p>\n<p>In <em>Mahalderam Team  Estate Pvt. Ltd. v. D. N. Pradhan [(1979) 49 Comp. Cas. 529 (Cal.)]<\/em>, a case  under the Employees&#8217; Provident Fund, Act, 1952, of which section 14A is <em>pari  materia<\/em>, all the directors of a company were prosecuted for the offence of  non-payment of provident fund contributions of the company&#8217;s employees, the  Calcutta High Court held that under the said section a company is made  primarily liable for an offence committed under the Act. The liability may be  extended to other persons vicariously only under the conditions laid down in  the section. A director of a company may be concerned only with the policy to  be followed and might not have any hand in the management of its day-to-day  affairs. Such person must necessarily be immune from such prosecutions. Thus,  it has to be established by placing before the Court necessary and sufficient  material from which the Court can satisfy itself, that the accused directors  took some part in the running of the business of the com&not;pany and a mere bald  statement that the accused persons are directors of the company and hence  responsible for the conduct of the business and management of the company will  not do.<\/p>\n<p>In the case of <em>Om  Prakash v. Shree Keshariya Investments Ltd. [(1978) 48 Comp. Cas. 85 (Delhi)],<\/em> had held that a distinction has to be made between directors who are on the  board purely by virtue of their technical skill-or because they represented  certain special interests and those who are in effective control of the  management and affairs and it would be unreasonable to fasten liability on  independent directors for defaults and breaches of the company where such  directors were appointed by virtue of their special skill or expertise but did  not participate in the management. This view has been followed by the Division  Bench of the Bombay High Court in the case of <em>Tri-Sure India Ltd. [(1983) 54  Comp. Cas. 197 (Bom.)].<\/em><\/p>\n<p>In<em> SMS  Pharmaceuticals Ltd. v. Neeta Bhalla &amp; Anr. [2005] 148 Taxman 128 (SC)<\/em> wherein this Court while dealing provisions of section 141 of the Negotiable  Instruments Act which is similar to section 278B laid down following important  law relating to liability of directors:<\/p>\n<p>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is necessary to specifically aver in a  complaint under section 141 that at the time the offence was committed, the  person accused was in charge of, and responsible for the conduct of business of  the company. This averment is an essential requirement of section 141 and has  to be made in a complaint. Without this averment being made in a complaint, the  requirements of section 141 cannot be said to be satisfied.<\/p>\n<p>(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Merely being a director of a company is  not sufficient to make the person liable under section 141 of the Act. A  director in a company cannot be deemed to be in- charge of and responsible to  the company for conduct of its business. The requirement of Section 141 is that  the person sought to be made liable should be in-charge of and responsible for  the conduct of the business of the company at the relevant time. This has to be  averred as a fact as there is no deemed liability of a director in such cases.<\/p>\n<p>(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Managing Director or Joint Managing  Director would be admittedly in-charge of the company and responsible to the  company for conduct of its business. When that is so, holders of such positions  in a company become liable under section 141 of the Act. By virtue of the  office they hold as Managing Director or Joint Managing Director, these persons  are in-charge of and responsible for the conduct of business of the company.  Therefore, they get covered under section 141.<\/p>\n<p>In <em>Madhumilan Syntex Ltd. v. UOI (2007) 290 ITR 199 (SC) <\/em>assessee  had deducted TDS but credited the same to the account of the Central Government  after the expiry of the prescribed time limit thereby constituting an offence  under section 276B r.w.s. 278B. A show cause notice was issued against the  company as well as its four directors as &ldquo;principal officers&rdquo;. The accused  pleaded that the ground of &ldquo;reasonable cause&rdquo;. However sanction for prosecution  was granted a complaint was filed against the appellants on 26th Feb., 1992 in  the Court of the Addl. Chief Judicial Magistrate (Economic Crime), Indore. The  accused filed applications under s. 245 of the Cr. PC, 1973 (hereinafter  referred to as &lsquo;the Code&rsquo;) for discharge from the case contending that they had  not committed any offence and the provisions of the Act had no application to  the case. It was alleged that proceedings were initiated <em>mala fide<\/em>. In  several other similar cases, no prosecution was ordered and the action was  arbitrary as also discriminatory. Moreover, there was &lsquo;reasonable cause&rsquo; for  delay in making payment and the case was covered by s. 278AA of the Act. The  directors further stated that they could not be treated as &lsquo;principal officers&rsquo;  under s. 2(35) of the Act and it was not shown that they were &lsquo;in-charge&rsquo; of  and were &lsquo;responsible for&rsquo; the conduct of business of the company. No material  was placed by the complainant as to how the directors participated in the  conduct of business of the company and for that reason also, they should be  discharged. However the prayers of the accused were rejected. Against this  rejection a Revision petition was filed which was also rejected. Against the  same Criminal petition was filed before the High Court which was also  dismissed. Hence the accused approached the Supreme Court. Following were the  important points of law laid down by the Apex Court: <\/p>\n<p>1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Wherever a company is  required to deduct tax at source and to pay it to the account of the Central  Government, failure on the part of the company in deducting or in paying such  amount is an offence under&nbsp; the Act and  has been made punishable. <\/p>\n<p>2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From the statutory provisions, it is  clear that to hold a person responsible under the Act, it must be shown that  he\/she is a &lsquo;principal officer&rsquo; under s. 2(35) of the Act or is &lsquo;in charge of&rsquo;  and &lsquo;responsible for&rsquo; the business of the company or firm. Where necessary  averments have been made in the complaint, initiation of criminal proceedings,  issuance of summons or framing of charge, cannot be held illegal and the Court  would not inquire into or decide correctness or otherwise of the allegations  levelled or averments made by the complainant. It is a matter of evidence and  an appropriate order can be passed at the trial. <\/p>\n<p>3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No independent and separate notice that  the directors were to be treated as principal officers under the Act is  necessary and when in the showcause notice it was stated that the directors  were to be considered as principal officers under the Act and a complaint was  filed, such complaint is entertainable by a Court provided it is otherwise  maintainable. <\/p>\n<p>4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Once a statute requires to pay tax and  stipulates period within which such payment is to be made, the payment must be  made within that period. If the payment is not made within that period, there  is default and an appropriate action can be taken under the Act. <\/p>\n<p>5. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is true that the Act provides for  imposition of penalty for non-payment of tax. That, however, does not take away  the power to prosecute accused persons if an offence has been committed by  them.<\/p>\n<p>Though the Apex Court did not go into the merits of the case and  decided the issue in respect of maintainability of criminal complaint, the  decision has given a clear warning to the corporates and their principal  officers, the need for strict adherence to time schedules in the matter of  payment of taxes, especially TDS. It is time that the taxpayers also realise  they have to be extra careful when it comes to remittance of the TDS, as it is  money due to the Government, which they have withheld from paying to a third  party. However it is important that the Revenue does not take shelter of this  decision and launch criminal prosecution even in case of few months of delayed  remittance of tax deducted at source. <\/p>\n<h2>13.&nbsp;&nbsp;&nbsp; Accountant <\/h2>\n<p>In <em>Dev v. State of <\/em><em>A.P.<\/em><em> 2002 Cri.L.J 4770 (Andhra Pradesh)<\/em> it was held that an Accountant is in-charge of  and was responsible to the company for the conduct of its business.<\/p>\n<div class=\"journal2\"> Reproduced with permission from the AIFTP Journal <\/div>\n<div class=\"journal3\">See also: <a href=\"https:\/\/www.itatonline.org\/articles_new\/guide-to-offenses-and-prosecutions-under-the-income-tax-act-1961-with-video\/\">Guide To Offenses And Prosecutions Under The Income-tax Act, 1961 by Dr. K. Shivaram, Sr. Advocate<\/a><\/div>\n<div class=\"journal3\">See also: <a href=\"https:\/\/www.itatonline.org\/articles_new\/law-on-bail-anticipatory-bail-discharge-and-quashing-of-proceedings-under-direct-taxes\/\">Law On Bail, Anticipatory Bail, Discharge And Quashing Of Proceedings Under Direct Taxes by Advocate Aditya R. Ajgaonkar<\/a><\/div>\n<table width=\"103%\" border=\"1\" cellpadding=\"5\" cellspacing=\"0\" bgcolor=\"#FFFFCC\">\n<tr>\n<td><strong>Disclaimer: <\/strong>The  contents of this document are solely for informational purpose. It does not  constitute professional advice or a formal recommendation. While due care has  been taken in preparing this document, the existence of mistakes and omissions  herein is not ruled out. Neither the author nor itatonline.org and its  affiliates accepts any liabilities for any loss or damage of any kind arising  out of any inaccurate or incomplete information in this document nor for any  actions taken in reliance thereon. No part of this document should be  distributed or copied (except for personal, non-commercial use) without  express written permission of itatonline.org<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>Section 278B of the Income-tax Act imposes draconian consequences of prosecution upon directors for offenses committed by the Company. Advocate Rahul K. Hakani has explained the nature and scope of liability and also drawn attention to all the important judgements &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/itatonline.org\/articles_new\/law-on-offenses-by-companies-and-prosecution-of-directors\/\"> <span class=\"screen-reader-text\">Law On Offenses By Companies And Prosecution Of Directors<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[35],"class_list":["post-4873","post","type-post","status-publish","format-standard","hentry","category-articles","tag-offenses-and-prosecutions-under-the-income-tax-act-1961"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts\/4873","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/comments?post=4873"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts\/4873\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/media?parent=4873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/categories?post=4873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/tags?post=4873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}