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TMI Blog2016 (3) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... of income under Section 139 of the Act and, while furnishing the return, has taken into account such sum for computing income in such return of income and has paid the tax due on the income declared by him in such return of income coupled with a certificate to this effect from an accountant in such form as may be prescribed. Having, therefore, regard to the factual aspects of the present case and the law relevant thereto, we are clearly of the view that the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, is duty bound to take up the appeal at the earliest and if it is found that the taxes, which were to be deducted, at source, by the present petitioner while making payment to the said two Corporations, have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectively. 2. Aggrieved by the demands so raised, the petitioner filed appeal along with an application for stay of the demand, before the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, on the ground, inter alia, that the payments, made to Bihar Rajya Pul Nirman Nigam Limited and Bihar State Road Development Corporation Limited, are in the nature of allotments of funds to the said Corporations, on the instructions of the Government of Bihar, for the purposes of construction of roads and bridges and that the same did not constitute a contract for work under Section 194(1) of the Act. 3. Having preferred an appeal, as indicated above, accompanied by an application for stay of the demand so raised, before the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel, appearing for the petitioner, and Ms. Archana Sinha @ Archana Shahi, learned Counsel, appearing for the respondents. 6. Without expressing any opinion on the correctness or the otherwise of the substantial questions of law, which have been raised by the writ petitioner including the question as to whether the payments made by the petitioner to the Corporations were in the nature of payment of contract or simple disbursement of amount on behalf of the State Government, we may point out that it has been submitted, on behalf of the petitioner, that even if it is assumed that the petitioner was liable to make deduction, at source, of the payments, which had been made to Bihar Rajya Pul Nirman Nigam Limited and Bihar State Road Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the District Treasury Officer, Patna, for the purposes of recovery of the said sum of ₹ 1,18,58,89,226/-? 9. Our quest for an answer to the above questions brings us to the Circular No.275/201/95-IT(B), dated 29.01.1997, which states, .. .. .. no demand visualized under Section 201(1) of the Income-tax Act should be enforced after the tax deductor has satisfied the officer-in-charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under Section 201(1A) of the Act till the date of payment of taxes by the deductee-assesee or the liability for penalty under section 271C of the Income-tax Act . 10. A careful reading of the Circular, which we have r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry recognition, a proviso has been added to sub-Section (1) of Section 201 of the Income Tax Act, 1961, which reads as follows: 201. Consequences of failure to deduct or pay.- (1) Where any person, including the principal officer of a company, - (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of Section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: 1[Provided that any person, incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this effect from an accountant in such form as may be prescribed. 14. Having, therefore, regard to the factual aspects of the present case and the law relevant thereto, we are clearly of the view that the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, is duty bound to take up the appeal at the earliest and if it is found that the taxes, which were to be deducted, at source, by the present petitioner while making payment to the said two Corporations, have been paid by the said two Corporations as deductees, the impugned demands, raised by the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, shall be set aside and the attachment of the account of the petitioner, maintained with the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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