MADHUMILAN SYNTEX LTD. vs U.O.I.

The Supreme Court upheld the prosecution of Madhumilan Syntex Ltd. and its directors under Section 278B of the Income Tax Act, 1961 for failure to credit Tax Deducted at Source (TDS) to the Central Government as mandated by Sections 194C and 200 of the Act. The Court found that the delay in payment, although later rectified with interest, did not constitute a reasonable cause to absolve the appellants from liability. The Court affirmed the High Court's rejection of the appellants' petition, thereby allowing the prosecution to proceed.