Section 20 of The Health Security Se National Security Cess Act, 2025
- (1)Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
- (2)Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
- (3)Where an offence under this Act has been committed by a taxable person being a partnership firm or a limited liability partnership or a Hindu undivided family or a trust, the partner or kartaor managing trustee shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly and the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.
- (4)Nothing contained in this section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. Explanation.---For the purposes of this section,---
- (a)"company" means a body corporate and includes a firm or other association of individuals; and
- (b)"director", in relation to a firm, means a partner in the firm.
Summary
(1) Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and.
Practical examples
FAQ
1. Who is held responsible when a corporate body commits a tax crime under Section 20 of the Health Security se National Security Cess Act, 2025?
Under Section 20 of the Health Security se National Security Cess Act, 2025, both the company itself and every person who was in charge of and responsible for its business when the offence happened are deemed guilty.
2. Can a company director who was not directly in charge of daily business still be punished under Section 20 of the national security cess law?
Yes, under Section 20 of the Health Security se National Security Cess Act, 2025, if it is proved that the crime was committed with the consent, connivance, or negligence of any director, manager, secretary, or officer, that person is also deemed guilty.
3. How can an in-charge manager protect themselves from liability under Section 20 of the Health Security se National Security Cess Act, 2025?
Under Section 20 of the Health Security se National Security Cess Act, 2025, a person is not liable if they prove that the offence was committed without their knowledge or that they exercised all due diligence, meaning careful and necessary effort, to prevent it.
4. Does Section 20 of the Health Security se National Security Cess Act, 2025 apply to partnership firms or trusts?
Yes, under Section 20 of the Health Security se National Security Cess Act, 2025, partnership firms, limited liability partnerships, Hindu undivided families, and trusts are covered, and partners, kartas, or managing trustees are deemed guilty in the same way.
Test yourself
Q1.Under Section 20 of the Health Security se National Security Cess Act, 2025, who is deemed guilty when a company commits an offence under the Act?
Q2.Under Section 20 of the Health Security se National Security Cess Act, 2025, what must an in-charge officer prove to avoid being punished for a company tax offence?
Q3.Under Section 20 of the Health Security se National Security Cess Act, 2025, who is deemed guilty if the taxable person is a partnership firm?
Q4.Under Section 20 and Section 19 of the Health Security se National Security Cess Act, 2025, if a company evades cess of six hundred lakh rupees and the offense is attributable to the negligence of a secretary, what is the maximum prison sentence the secretary could face if convicted?