The Income Tax Department by its Assistant Commissioner of Income Tax (TDS), TDS Circle 3(1) H.M.T. Bhavana, Bellary Road Bangalore - 560 032 V. Shri Srikar Reddy Vempati, Operation Director M/S Sicon Design Technologies Private Limited

CRL.RP/385/2020

AI Insights

The case involves the Income Tax Department, represented by its Assistant Commissioner of Income Tax (TDS), as the petitioner, and Shri Srikar Reddy Vempati, the Operation Director of M/S Sicon Design Technologies Private Limited, as the respondent. The petitioner sought to challenge the discharge of the respondent from charges under Section 276B of the Income Tax Act, 1961, which pertains to failure to deduct tax at source. The Special Court for Economic Offences had previously discharged the respondent along with other accused, citing insufficient evidence of their involvement in the day-to-day management of the company. The High Court of Karnataka, after reviewing the submissions and previous related cases, particularly the allowed revision petition against another accused, decided to set aside the discharge order for the respondent, allowing for further examination of their involvement in the company's management.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834767 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-02-2026
• Assessment Year: misc
• Other Referred Cases: Crl.RP.No.396/2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHANDRA K
• Assessee Lawyers: E I SANMATHI
• Keywords: Criminal Revision Petition; Criminal Revision Petition; Day to day management; Discharge; Economic offences; Vicarious Liability
• Section: 401; 397; 276B

Judgement Text

" - 1 - HC-KAR NC: 2026:KHC:6699 CRL.RP No. 385 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY CRIMINAL REVISION PETITION NO. 385 OF 2020 BETWEEN: THE INCOME TAX DEPARTMENT BY ITS ASSISTANT COMMISSIONER OF INCOME TAX (TDS), TDS CIRCLE 3(1) H.M.T. BHAVANA, BELLARY ROAD BANGALORE - 560 032. …PETITIONER (BY SRI.E.I.SANMATHI, ADVOCATE) AND: SHRI SRIKAR REDDY VEMPATI OPERATION DIRECTOR M/S SICON DESIGN TECHNOLOGIES PRIVATE LIMITED BANGALORE - 560 037. …RESPONDENT (BY SRI.CHANDRA SHEKARA K, ADVOCATE) THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HONBLE COURT MAY BE PLEASED TO SET ASIDE THE DISCHARGE OF RESPONDENT VIDE ITS ORDER DATED 01.10.2019. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: Printed from counselvise.com Digitally signed by NANDINI M S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:6699 CRL.RP No. 385 of 2020 CORAM: HON'BLE MR. JUSTICE S VISHWAJITH SHETTY ORAL ORDER The petitioner is before this Court in this Criminal revision petition filed under Section 397 read with Section 401 of Cr.PC with a prayer to set aside the order dated 01.10.2019 passed by the Special Court for Economic Offences, Bengaluru in C.C.No.77/2018, discharging the respondent/accused for the offence punishable under Section 276B of the Income Tax Act, 1961. 2. Heard the learned counsel for the parties. 3. Learned counsel for the petitioner submits that proceedings was initiated before the Jurisdictional Special Court at Bangalore against 6 accused in C.C.No.77/2018 alleging that they had committed offence punishable under Section 276B of the Income Tax Act, 1961. Respondent herein is accused No.6 in the said case. Accused No.1 is the Company and accused No.2 is the Managing Director of the Company. The Trial Court vide the order impugned Printed from counselvise.com - 3 - HC-KAR NC: 2026:KHC:6699 CRL.RP No. 385 of 2020 had discharged accused No.2 to 6 in CC No. 77 of 2018 and as against the said order petitioner had filed Crl.RP.No.396/2020 assailing the order impugned insofar as it relates to accused No.2 who is the Managing Director of the Company. He submits that the said revision petition has been allowed by the Co-ordinate Bench of this Court on 03.02.2025. 4. Learned counsel for the respondent submits that accused No.2 is the Managing Director of the Company and the petitioner is only a Director along with the accused Nos.3 to 5. Petitioner was not participating in the day to day affairs of management of the Company and therefore he cannot be vicariously held liable on behalf of the Company. It is only accused No.2 Managing Director who was participating in the day-to-day management affairs of the Company. Accordingly, he prays to dismiss the petition. Printed from counselvise.com - 4 - HC-KAR NC: 2026:KHC:6699 CRL.RP No. 385 of 2020 5. The Trial Court had framed the following two points for determination in CC No. 77 of 2018: Point No.1: Whether there are sufficient materials to frame the charge against the accused No.1 Company for the offence punishable under Section 276B of the Act? Point No.2: Whether the accused No.2 to 6 shown that they are not in charge of day today affairs of accused No.1 Company, hence liable to be discharged? 6. Vide the order impugned point No.1 was answered affirmatively and point No.2 was answered in the negative, for the reason that there was no evidence to the effect that accused Nos.2 to 6 were in charge of day-to-day affairs of accused No.1 Company. The said finding recorded by the Trial Court is common to accused Nos.2 to 6. The Co-ordinate Branch of this Court has set aside the said finding in Crl.RP.No.396/2020 which was filed by the petitioner as against accused No.2. Under the circumstances, I am of the opinion that even this Criminal revision petition needs to be allowed, reserving liberty to Printed from counselvise.com - 5 - HC-KAR NC: 2026:KHC:6699 CRL.RP No. 385 of 2020 the respondent herein to demonstrate before the Trial Court that there is no material to prove that respondent/accused No.6 was participating along with accused No.2 in the day-to-day management affairs of accused No.1 Company. Accordingly, the following: ORDER i. The Criminal revision petition is allowed. ii. The impugned order dated 01.10.2019 passed by the Special Court for Economic Offences, Bengaluru in C.C.No.77/2018 is set aside as against the respondent/accused No.6. Sd/- (S VISHWAJITH SHETTY) JUDGE KVR List No.: 1 Sl No.: 23 Printed from counselvise.com "