TMI Blog2000 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ndra Agencies deducted a sum of Rs. 2,62,500 and a sum of Rs. 4,500 at source in respect of the two amounts of prize money indicated above. Chandra Agencies, it appears, did not deposit the money deducted at source in the Government treasury. Therefore, the assessing authority while making the assessment of the petitioner-respondent for 1986-87 did not give credit for the tax deduction at source. Chandra Agencies did not intimate the date of actual payment of the money deducted at source to the Government account as requested, but replied that the records had been forwarded to the Chairman, Vaibhavshali Bumper, and hence they were not able to furnish the date of payment of taxes to the treasury. This explanation, it is stated in the order, was not acceptable and, accordingly, the credit for the said amount was not given. The order further provided, "the credit for this will be given only when evidence as to the actual payment of the same is produced". A copy of the assessment order dated August 14, 1986, containing the note as indicated above has been filed as annexure-3 to the writ petition. After the order dated August 14, 1986, was passed by the assessing authority as indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agencies were requested to intimate the actual date of payment of tax deducted at source to the Central Government who in reply intimated that the records were forwarded to the chairman, Vaibhavshali Bumper. Hence, the date of payment of tax to the Government treasury could not be furnished. Though it is not clear from the note, but from the tenor of what has been written in the note, it appears that the Department, namely, the appellants, may have made some enquiries from Chandra Agencies. It also does not seem to have been denied by Chandra Agencies that it had deducted the income-tax at source, rather it appears to have been replied to the appellants that the records were forwarded to the chairman, Vaibhavshali Bumper, hence they were not able to furnish the date of payment to the Government treasury. From all the facts and circumstances and the material on record, it appears to be a case where, in all probability, the amount was deducted at source by Chandra Agencies from the prize money payable to the petitioner-respondent, but the same does not seem to have been made over to the Government treasury for payment to the Central Government. In the light of the above facts, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of sections 192 to 194, section 194A, section 194B .... shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted, and such other particulars as may be prescribed." There is a bar against direct demand on the assessee where the tax is deducted at source as provided under section 205 of the Act which reads as under: "205. Where tax is deductible at the source under sections 192 to 194, section 194A, section 194B ..... the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income." From a perusal of the provisions quoted above relating to the deduction of tax at source in the matters relating to prize money of lotteries, it is evident that the person responsible to make the payment to the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposit of the said amount in the account of the Central Government. The Income-tax Department seems to have made enquiries about the exact date of payment to the Central Government which Chandra Agencies could not furnish on the ground that the papers were forwarded to the chairman of Vaibhavshali Bumper. In such a category of cases we feel that the amount of tax can be recovered by the Income-tax Department treating the person responsible to deduct tax at source as an assessee in default in respect of the tax. It would not be possible to proceed to recover the amount of tax from the assessee. The assessee cannot be doubly saddled with the tax liability. Deduction of tax at source is only one of the modes of recovery of tax. Once this mode is adopted and by virtue of the statutory provisions the person responsible to deduct the tax at source deducts the amount, only that mode should be pursued for the purpose of recovery of tax liability and the assessee should not be subjected to other modes of recovery of tax by recovering the amount once again to satisfy the tax liability. It is, therefore, provided under section 201 of the Income-tax Act that the person responsible to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in case the tax liability is not discharged and it still subsists. In this view of the matter, Shri K. P. Sarma, learned counsel appearing for the Revenue, has rightly defended the note appended by the Assessing Officer in the order of assessment making it clear that credit for the amount deducted was not being given and that will be given only when evidence as to actual payment of the amount to the Central Government is furnished. But this position would not legally justify initiation of recovery proceedings against the assessee from whose income tax has been deducted at source, but the person responsible to deduct the tax fails to deposit the same in the Government treasury. The statutory scheme evolved to employ this mode of recovery of tax at source also points to the same position and in our view rightly. Otherwise a taxpayer from whose income tax is liable to be deducted at source would be exposed to a great vulnerable position. If some unscrupulous persons responsible to deduct the tax at source, after deducting the amount do not deposit the amount in the Government treasury, such persons should be saddled with the tax liability. Therefore, under section 201 of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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