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2015 (4) TMI 873 - KARNATAKA HIGH COURTPersonal liability of administrator of trust for non deduction of tax at source - Principal Officers - 40% professional fee paid to consultants/doctors working in their hospital - whether action should have been initiated against M/s. Sri Adichunchanagiri Shikshana Trust? - whether proceedings u/S.201(1) and 201(1)(a) of the Act cannot be initiated against the assessee who had submitted the TDS returns and in whose name TDS account number was allotted and who was issuing TDS certificates on behalf of the hospital and the Trust? - Held that:- The consequences of failure to deduct or pay results in the assessee being declared as assessee in default. Therefore, the persons against whom proceedings may be initiated for failure to deduct or pay is the assessee, who may made payment without deducting TDS. In the instant case the assessee was acting as an employee of the Trust. The payment made by him was not in his individual capacity. It was on behalf of the Trust. The money paid is out of the Trust. The consequences of failure to deduct or pay the TDS tax should be visited on that Trust for denying the benefit under the Act. The proceedings initiated is not a criminal proceeding. Under these circumstances the impugned proceedings could not have been initiated against the Administrator, who was only acting as an employee of the Trust, as no payments were made to in his individual capacity and the payments were made by the Trust. Therefore, both the Appellate Authorities were justified in setting aside the order passed by the Assessing Authority, reserving liberty to the department to proceed against the Trust. - Decided in favour of assessee.
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