The company failed to discharge tax liabilities for the relevant assessment years 2014-15, 2015-16, and 2016-17, leading the Income Tax Department to raise a demand for tax dues amounting to Rs. 4.44 crores. During pendency of recovery proceedings, it was found that the company, through its director Rakesh Agarwal, transferred an Audi Car in favour of his daughter-in-law without adequate consideration. The Department treated this transfer as void under section 281 and proceeded to prosecute the directors under section 276. Sanction for prosecution was accorded by the Principal Commissioner of Income Tax to prosecute the petitioner under section 276. The complaints were filed against the petitioners before the trial court, but notably, the company itself was not arrayed as an accused. On writ, the Court held that where an offence is committed by a company, section 278B creates a deeming fiction whereby both the company and every person in charge of, and responsible to the company for the conduct of its business are deemed guilty and thus, the company must first be arraigned and only then can its officers be fastened with vicarious liability. Omission to implead the company is not a mere technical irregularity but goes to the root of jurisdiction. referred to Aneeta Hada v. Godfather Travels & Tours (P.) Ltd. [2012] 21 taxmann.com 43/113 SCL 564 (SC), Sharad Kumar Sanghi v. Sangita Rane (2015) 12 SCC 781, Sushil Sethi v. State of Arunachal Pradesh (2020) 3 SCC 240. Accordingly, the orders passed by the ACMM (Special Acts), Central District, Tis Hazari Courts in complaint cases titled “ITO v. Nilesh Agarwal” and “ITO v. Rakesh Agarwal” and all proceedings emanating therefrom stand quashed. (AY. 2014-15, 2015-16 & 2016-17)