PRITI VIRAL MEHTA vs. SHRI ABHISHEK YADAV DY COMMISSIONER OF INCOME TAX TDS 2-3

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WP/917/2023HC BombayHCBM01010760202308 August 2025Bench: HON'BLE SHRI JUSTICE JITENDRA SHANTILAL JAIN2 pages
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What did the High Court hold?

The High Court held that the prosecution against the petitioner could not be sustained. The court noted that the petitioner was an independent professional Chartered Accountant rendering accounting services and was not a director. Crucially, the complaint lacked any averments to demonstrate how she was in charge of the company's affairs, especially concerning tax deducted at source compliances. Given her status as an independent professional and the absence of specific allegations linking her to the company's management or tax defaults, the court found no basis for the prosecution. Consequently, the process dated November 1, 2019, and the complaint (C.C. No. SW/3800558 of 2019) insofar as it concerned Accused No.2 (the petitioner) were quashed and set aside. The petition was disposed of.

What were the facts?

The petitioner, Priti Viral Mehta, a Chartered Accountant, challenged a prosecution initiated against her in the Additional Chief Metropolitan Magistrate's Court, Mumbai. She provided accounting services to Accused No.1-Company. Although not a director, she was impleaded as Accused No.2 in the complaint, described as a director. The complaint lacked specific averments detailing her role as a director or her responsibility for the company's day-to-day affairs or tax compliance. The professional fees she received were treated as professional services by Accused No.1, with tax deducted under Section 194J of the Income Tax Act. The petitioner ceased providing services in November 2016. The prosecution was launched via C.C. No. SW/3A0055A of 2019, with a process issued on November 1, 2019.

What were the issues?

1. Whether the prosecution launched against the petitioner, described as a director but functioning as an independent Chartered Accountant rendering professional services, is sustainable in the absence of specific averments in the complaint regarding her role in the company's day-to-day affairs and tax compliance, particularly when she ceased services in November 2016? (Question of law and fact, concerning liability under the Income Tax Act). Assessee's Contention: The petitioner argued that she was an independent professional Chartered Accountant providing accounting services and not a director. She contended that the complaint lacked specific averments to establish her responsibility for the company's affairs or tax compliance, making the prosecution unsustainable. She also highlighted that she stopped rendering services in November 2016. Revenue's Contention: The judgment does not record any specific arguments made by the respondent revenue.

Which sections of the Income-tax Act were involved?

Section 194J

AI-generated summary — verify with the full judgment below

4-WP-917-23.DOCX rsk IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE SIDE JURISDICTION WRIT PETITION NO.917 OF 2023 Priti Viral Mehta … Petitioners Versus Shri Abhishek Yadav Dy. Commissioner Of Income Tax TDS 2-3 … Respondents ______________________________________________________ Mr. Vipul J. Shah , for Petitioners. Mr. Shrikant Yadav, APP, for Respondent. Ms. Ateeba Hasan i/b Mr. Suresh Kumar, for Respondent No.2. ______________________________________________________ CORAM : Jitendra Jain, J. DATED : 8 August 2025 PC:- 1. This petition challenges the prosecution launched against the petitioner vide C. C. No. SW/3A0055A of 2019 before the Additional Chief Metropolitan Magistrate, Ballard Pier, Mumbai. 2. The petitioner is a professional Chartered Accountant rendering accounting services to accused No.1-Company. Although she is not a director, in the complaint she has been made as accused No.2 by describing her as director. In the complaint, there is no further averment against accused No.2 of her being director or a person in-charge of the day today affairs of the company. Page 1 of 2

4-WP-917-23.DOCX 3. The professional fess received by the petitioner from accused No.1 for her accounting work was treated as fees for professional services by accused No.1 and tax was deducted under Section 194 J of the Income Tax Act. 4. There is no rebuttal to the fact that accused No.2- petitioner was not a director, but she was rendering the accounting service as a professional Chartered Accountant. It is also important to note that she stoped rendering her services from November 2016. 5. In view of above, since she is an independent professional chartered accountant rendering accounting services and not a director and in the absence of any averment in the complaint how she was in-charge of the affairs of the company and more particularly for compliances of the tax deducted at source, the complaint against the petitioner cannot be sustained. 6. In view of the above, the process dated 1 November 2019 issued by the Chief Metropolitan Magistrate, Ballard Pier Mumbai and complaint CC NO.SW/3800558 of 2019 insofar as accused No.2 is concerned is quashed and set aside. 7. Petition disposed of. No order as to cost. (Jitendra Jain, J) Page 2 of 2

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