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TMI Blog2014 (9) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Hajarnavis, Asst. CIT (Bom.) [2007 (7) TMI 7 - HIGH COURT , BOMBAY] - Once it is established that the tax has been deducted from the salary of the employee, the bar u/s 205 of the Act comes into operation and it is immaterial as to whether the tax deducted at source has been paid to the Central Government or not, because elaborate provisions are made under the Act for recovery of tax deducted at source from the person who has deducted such tax - the bar u/s 205 of the Income Tax Act prevents the department from demanding the tax deducted at source from the assesee who has suffered a deduction - the liability rests with the Official Liquidator – Decided in favour of assessee. - T.C.A.No.388 of 2008 and M.P.Nos.1 of 2007 and 1 of 2014 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative remedy and dismissed the appeal, against which, the assessee had filed an appeal before the Income Tax Appellate Tribunal. 5. The Tribunal found that the order of the Appellate Authority is sustainable, however, modified that if the assessee so desires, can approach the Assessing Officer and file all necessary evidence to show that the tax has already been deducted at source, against which, the present appeal is filed. 6. On Admission, the following substantial questions of law were raised: 1. Whether the Tribunal was right in Law in holding that the Appeal against the Assessment Order dated 27.11.2003 of the Respondent under Section 143(1) of the Income Tax Act is not maintainable? 2. Whether the Tribunal is right in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the Revenue also pointed out that if the tax deducted is not paid to the Government, the Assessing Officer has the authority to demand the tax and impose penalty under Sub sec.(2) of Sec.272 of the Income Tax Act. 12. The learned counsel, who is appearing for the Company in Liquidation, would submit that the Company was put on liquidation only in the year 2004. and the Assessment Period is 2001-2002 and therefore, the Company, in liquidation, is not under obligation to discharge the liability.. 13. Heard both sides and perused the materials available on record. 14. It is not disputed that tax was deducted at source by the tenant Union Motors Services Limited and they have issued some Certificates which has been given cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce. In the present case, we are concerned with the second mode of recovery, namely, recovery of tax by deduction at source. 17. Sec.201 of the Act, inter alia, provides that where a company bound to deduct tax at source fails to deduct tax or after having deducted fails to pay the said tax to the credit of the Central Government within the stipulated time, then the Company shall be deemed to be an assessee in default in respect of the tax and the said company shall be liable to pay the simple interest at 12 per cent per annum on the TDS amount from the date on which such tax was deductible upto the date on which such tax is actually paid to the Central Government. Section 201(2) of the Act further provides that till the TDS amount with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax has been deducted. Section 205 of the Act, as it stood at the relevant time, read thus: 205. Bar against direct demand on assessee._ Where tax is deductible at the source under sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 195 and section 196A, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income . 20. From the language of section 205, it is clear that once the tax is deducted at source, the same cannot be levied once again on the assessee who has suffered the deduction. Once it is established that the tax has been deducted from the salary of the employee, the bar under section 205 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. When the person like a tenant acts as a representative or agent of the Revenue for such deduction and if there is any violation on his/her part, the consequence should fall only on the Revenue and that cannot be foisted on the assessee. It is no doubt true that the assessee if pays the tax in terms of the tax liability, i.e., under the assessment order and to the extent of the amount is not paid to the Government remains a liability on the assessee also and could look upto the tenant to recover the amount for reimbursement. The question in the light of the provisions is that, should the assessee be driven to that plight? I thank that the provision is to provide a protection to the assessee and to prevent the Revenue from embarking on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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