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TMI Blog1995 (11) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... erest amount of Rs. 3,68,342 to M/s. Guru Investments and of Rs. 5,425 to M/s. Bajaj Electronics. No tax was however deducted at source in terms of the provisions of section 194A. It was the plea of the assessee initially before the Assessing Officer that tax had not been deducted as the payees had submitted statements in Form Nos. 15A and 15H. The Assessing Officer, however, observed that no statement under section 206A had been filed within the prescribed time. The Assessing Officer levied interest of Rs. 23,074 under section 201(1A) and penalty of Rs. 37,376 under section 221 for non-deduction of tax by the trust. 2. Before the CIT(A), it was pleaded on behalf of the assessee that inasmuch as the assessee was to be assessed as an " ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to confirm the levy of interest under section 201(1A) by observing that the issue raised in those appeals was squarely covered by the decision of the ITAT, Bombay Bench, in the case of ITO v. Subhas Metal Indl. [1993] 44 ITD 677. The learned DR has also relied on the aforesaid decision of the ITAT, Bombay Bench in the case of Subhash Metal Indl. in which the following observations are found to have been made : " Trust connotes a legal concept of relationship just as other relationships subsist under the law. The relationship of the partners is governed by the Indian Partnership Act, 1932. Similarly, the relationship which exists pursuant to the creation of trust is governed by the Indian Trust Act, 1882. In explaining the concept of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, on the other hand, strongly contended that the trust is to be equated with its sole beneficiary and hence, its status has rightly been considered by the CIT(A) to be as an " individual ". He also referred to the judgment of the ITAT, Bangalore Bench dated 5-4-1995 in ITA No. 1250 (Bang.)/1989 and C.O. No. 54 (Bang.)/1989 in the case of the assessee-trust for this very assessment year in which the Tribunal had cancelled the assessment of the assessee in the status of association of persons. The learned counsel for the assessee, therefore, argued that the assessee is required to be assessed as nothing but " individual " and hence, the provisions of section 194A should not apply to it. In support of his contention, he relied on the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on responsible for paying " and that the firm itself will be liable to be held as responsible and guilty for the offence of not deducting tax at source on behalf of the firm. 7. We completely agree with the contentions of the learned DR in this regard. Section 204 defines " person responsible for paying "(as appearing in the various sections relating to deduction of tax at source including section 194A), As per clause (iii) of section 204 which applies to the present case, the person responsible for paying shall mean the payer himself, or, if the payer is a company, the company itself including the principal officer thereof. Thus, if the payer be an HUF, the person responsible for deducting tax at source shall be the HUF only and not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual, firm or the HUF, whatever the case may be, can be taken as anything other than the entities themselves and the status of the person physically incharge of the affairs of the entities can, in no circumstances, be taken into consideration. 8. However, it is very difficult to accept the other contention of the learned DR that the trust is something different from the trustees. An argument has been placed by him before us that in the case of M. L. Family Trust the counsel for Revenue had submitted that it is the liability of the representative assessee, i.e., the trustees and, therefore, the trustees being the representative assessee who have the liability to deduct the tax and to pay the same to the Revenue should be considered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciaries were individuals, the status of the trustees bring same as that of beneficiaries, the trustees were also individuals and not AOP. It was thus held that the provisions of section 194A were, therefore, not applicable in case of such trustees. The Madras High Court also held in the case of Arihant Trust that when the trust was treated as an individual while receiving the income, there is not law to change its status for other purposes and hence, it was to be treated as same individual for the purpose of section 194A. In both the cases, the respective High Courts held that inasmuch as there was no liability with the trusts to deduct tax at source, prosecution proceedings as launched by the Department against them for failure to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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