TMI Blog2005 (6) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... . - - - - - Dated:- 9-6-2005 - Judge(s) : D. V. SHYLENDRA KUMAR. JUDGMENT D.V. Shylendra Kumar J.- The petitioner is an assessee under the Income-tax Act, 1961 (for short, "the Act"). This is a peculiar case where the petitioner-assessee is challenging the enforcement of demand made at annexure H dated December 5, 2002, wherein it is indicated that on verification of the records by the authorities under the Act, it was found that income-tax arrears were due from the petitioner for the period as indicated therein, and the petitioner-assessee was called upon to make payment of the amount within 10 days from the date of receipt of the notice, failing which coercive recovery proceedings would be initiated against the petitioner. The amounts mentioned in annexure H are as follows: Assessment year Amount (in Rs.) 1997-98 10,382 1998-99 61,111 1999-2000 2,01,176 2000-01 2,87,852 2001-02 1,09,678 The assessee had responded to the notice, pointing out that the demands for the years 1999-2000 to 2001-02 were not correct or justified; that the said demand included even the amounts that had been deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la. I have heard Sri M.V. Seshachala, who submits that while the factum of deduction by the tenant [of the petitioner] was not definite or within the knowledge of the Department, it is a fact that the petitioner had not furnished along with the returns of income for the relevant assessment years, the certificates of deduction as contemplated in terms of section 203 of the Act. Learned standing counsel drew my attention to the provisions of section 139(9) of the Act and submits that it is incumbent on an assessee while filing the returns to enclose all such certificates evidencing payment of tax deducted at source; that on the failure, the return can be treated as an incomplete return or wrong return; that it is the statutory requirement that such certificate should be enclosed along with the return itself and undoubtedly in the present case it has not been done so; that even in terms of the provisions of section 190 onwards in Chapter-XVII of the Act, relating to the collection and recovery of tax, deduction of tax at source is akin to an advance payment of tax; that the deduction of tax at source in respect of rents payable by persons other than individuals or Hindu undivided fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and if such amount is already paid to the Central Government, it should be treated as payment on behalf of the assessee and then only it can be recovered from the person deducting the tax and if such event has not happened, the assessee cannot call in aid the protection under section 205 of the Act; that the bar does not operate in a situation where the amount has not reached the coffers of the Government. It is accordingly submitted by learned standing counsel appearing for the respondents that so long as the amount has not reached the coffers of the State, it is still open to the Revenue to recover the amount either from the person who has deducted or from the assessee himself/herself, and if the provisions are understood in such a manner, no exception can be taken in regard to the impugned demand and there is no occasion for this court to interfere or intervene in exercise of extraordinary writ jurisdiction and, therefore, the writ petition deserves to be dismissed. Before I discuss the legal position, it is necessary to notice certain factual aspects peculiar to this case. They are : The deduction by the lessee, the person responsible for doing so, is not much in dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n obligation is cast on the person responsible, namely, the person who has deducted the amount and the Act also provides for initiation of proceedings against the person on his/her failure to do so, right up to the prosecution of the person for recovery of the amount with interest. The condition of remittance is not referred to or made a requirement for the protection to the assessee under section 205 of the Act. Even if one reads the earlier provisions such as sections 192, 194-I, 199, 200, 201, 202 and 203 to presume that payment being on behalf of the assessee having expressly been made applicable when the amount is remitted and granted to give credit to the amount to the tax payable by the assessee also, only when the amount deducted is also remitted, whereas, there is a clear in the departure in the case of section 205 by not mentioning the words "remittance of the amount" in this section. Here again, for imposing the bar on the Revenue for making a direct demand on the assessee, what is indicated in the section is a requirement in law for deduction and factual deduction and nothing more. In so far as such requirements are concerned, in the present case, it is not much in disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal and agent, as discussed above, for a default of the agent of the Revenue, the petitioner-assessee, who is a third party in relation to such relationship cannot be penalized. In the circumstances, I am of the view that the Revenue is to be definitely restrained in terms of section 205 of the Act from enforcing any demand on the assessee-petitioner in so far as the demand with reference to the amount of tax which had been deducted by the tenant of the assessee in the present case, and assuming that the tenant : had not remitted the amount to the Central Government. The only course open to the Revenue is to recover the amount from the very person who has deducted and not from the petitioner. In the result, this writ petition is allowed in part and the demand under the impugned notice at annexure H dated December 5, 2002, in so far as it relates to the demand for payment of tax, which had already been deducted by the tenant of the petitioner for the three assessment years 1999-2000, 2000-01 and 2001-02 stands quashed. The Revenue is restrained from enforcing such demand as against the petitioner either by raising a demand or by any other coercive method. It is open to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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