Can accounts manager be held liable for statutory dues
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 August 2014
Is there any provision in the new companies act 2013 or IT act or ST Act which can hold an accounts manager liable for unpaid statutory dues of Service Tax and TDS or any other dues?
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 August 2014
Please reply to the above query
18 July 2024
Under the Companies Act 2013, Income Tax Act, and Service Tax Act, liability for non-payment of statutory dues like Service Tax and TDS typically rests with the company itself rather than individual employees such as an accounts manager. However, there are certain provisions where individuals can be held personally liable under specific circumstances:
1. **Income Tax Act (ITA)**:
- **Section 276B**: This section provides for prosecution in case of failure to pay tax deducted at source (TDS) to the government.
- **Section 278B**: Provides for punishment for failure to pay the tax collected at source (TCS) to the government.
In these cases, if it is proven that the accounts manager willfully evaded paying TDS or TCS, they may be held personally liable under the ITA.
2. **Service Tax Act**:
- **Section 89(1)(d)**: This section provides for prosecution and penalties for failure to pay service tax collected to the government.
Similar to the ITA, if an accounts manager is found guilty of willful evasion or non-payment of collected service tax, they can be held personally liable under this section.
3. **Companies Act 2013**:
- The Companies Act primarily deals with corporate responsibilities and liabilities. While it does not directly impose personal liability on employees for unpaid statutory dues, it does mandate that certain officers of the company, such as the Managing Director, CEO, CFO, or Company Secretary, ensure compliance with legal obligations. Failure to discharge these duties can result in penalties and in some cases, disqualification.
It's important to note that liability under these Acts is usually attributed to individuals who are directly responsible or involved in the act of non-compliance or evasion. The accounts manager, while responsible for maintaining accurate records and ensuring timely payments, is generally not personally liable unless there is evidence of willful neglect or fraud on their part.
In practice, statutory dues like TDS and Service Tax are the responsibility of the company as a whole. However, all officers, including the accounts manager, should ensure that these dues are calculated correctly, paid on time, and compliant with applicable laws to avoid any potential liability issues.
1. **Income Tax Act (ITA)**:
- **Section 276B**: This section provides for prosecution in case of failure to pay tax deducted at source (TDS) to the government.
- **Section 278B**: Provides for punishment for failure to pay the tax collected at source (TCS) to the government.
In these cases, if it is proven that the accounts manager willfully evaded paying TDS or TCS, they may be held personally liable under the ITA.
2. **Service Tax Act**:
- **Section 89(1)(d)**: This section provides for prosecution and penalties for failure to pay service tax collected to the government.
Similar to the ITA, if an accounts manager is found guilty of willful evasion or non-payment of collected service tax, they can be held personally liable under this section.
3. **Companies Act 2013**:
- The Companies Act primarily deals with corporate responsibilities and liabilities. While it does not directly impose personal liability on employees for unpaid statutory dues, it does mandate that certain officers of the company, such as the Managing Director, CEO, CFO, or Company Secretary, ensure compliance with legal obligations. Failure to discharge these duties can result in penalties and in some cases, disqualification.
It's important to note that liability under these Acts is usually attributed to individuals who are directly responsible or involved in the act of non-compliance or evasion. The accounts manager, while responsible for maintaining accurate records and ensuring timely payments, is generally not personally liable unless there is evidence of willful neglect or fraud on their part.
In practice, statutory dues like TDS and Service Tax are the responsibility of the company as a whole. However, all officers, including the accounts manager, should ensure that these dues are calculated correctly, paid on time, and compliant with applicable laws to avoid any potential liability issues.
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