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Issues Involved:
1. Compliance with sections 192 and 200 of the Income-tax Act, 1961. 2. Levy and collection of interest u/s 201(1A) and its limitation under section 231. Summary: Issue 1: Compliance with sections 192 and 200 of the Income-tax Act, 1961 The Tribunal held that the assessee, an employer-company, failed to comply with sections 192 and 200 of the Income-tax Act, 1961, by not uniformly depositing tax on tax-free salaries and perquisites provided to expatriate employees. Consequently, the provisions of section 201(1A) were attracted. The Income-tax Officer charged interest of Rs. 28,471 under section 201(1A), which was later increased to Rs. 46,008.47 after a remand by the Tribunal. The Appellate Assistant Commissioner initially held that the demand was bad in law and barred by limitation, but the Tribunal upheld the Income-tax Officer's action, following a precedent set in the case of Grindlays Bank Ltd. Issue 2: Levy and collection of interest u/s 201(1A) and its limitation under section 231 The assessee argued that tax should only be deducted from the net salary actually paid and not from the gross salary, which included tax-free perquisites. This argument was rejected on the grounds that the employer is obligated to deduct tax on the estimated income, including perquisites, as defined in sections 15, 16, and 17 of the Act. The court also dismissed the argument that the employer was not responsible for deducting tax at source, stating that the company itself is the person responsible for payment under section 204(i). Regarding the limitation for recovery of interest, the court held that section 231's limitation period applies only to recovery proceedings under the Act and does not preclude the government from filing a suit to recover outstanding tax under general law. Therefore, the argument that the recovery of tax was barred by limitation was not sustainable. The Tribunal's decision to charge interest u/s 201(1A) was upheld, and both questions were answered in the affirmative, in favor of the Revenue. There was no order as to costs.
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