TMI Blog2015 (10) TMI 2798X X X X Extracts X X X X X X X X Extracts X X X X ..... d though necessary details were furnished to the authority concerned by the petitioners, recovery proceedings are sought to initiated - HELD THAT:- There is no dispute that the 2nd respondent was a tenant under the petitioners herein. Now, the petitioners claim that the 2nd respondent vacated the premises long back. It is the specific case of the petitioners that though the 2nd respondent company effected TDS, it had failed to remit the same into the account of the Income Tax Department. This is a disputed fact which cannot be resolved in this writ petition without any material and in the absence of the 2nd respondent. Having regard to the fact that the deduction of TDS from the amount payable to the petitioners towards rent as well as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are sought to initiated. Hence, the petitioners are now before this court for appropriate reliefs. 4. The learned counsel appearing for the petitioners has brought to the notice of this court an order passed by this court in Executors of the Estate of S. Shanmuga Mudaliar v. The 7 Assistant Commissioner of Income tax and another, reported in CDJ 2014 MHC 4040 wherein this court has held as follows:- 17. This has been dealt with by the Bombay High Court in the case of (Yashpal Sahni vs Rekha Hajarnavis, Asst. CIT (Bom.) reported in (2007) 293 ITR 539(Bom), wherein the Bombay High Court has held as follows: 15. Chapter XVII of the Income Tax Act, 1961, provides for collection and recovery of tax by two modes. They are (one) dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we may also note that every person deducting tax at source is required to issue a certificate under section 203 of the Act specifying the amount of tax deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed. Section 199 of the Act provides that any tax deducted at source under the provisions of Chapter XVII and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made and the credit shall be given to him for the amount so deducted on the production of the TDS certificate issued under section 203 of the Act. Section 205 of the Act provides that where tax is deductible at the source under Chapter XVII of the Act, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principles of the Law of Principal and Agent. If we look at the scheme for the provision of deduction of tax at source, it becomes obvious that such person is acting on behalf of the Revenue, i.e.,as an agent of the Revenue. In fact, the person is enabled statutorily to make deduction and remit the amount to the Central Government, though in the instant case, the person who has deducted the amount may be the tenant or lessee of the petitioner and there is such inter se relationship as between the two, insofar as the deduction of tax at source representing 20 per cent of the monthly rent payable as envisaged under Section 194-I of the Act is concerned, the deduction is under the statutory obligation and on behalf of the Revenue and becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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. 19. The facts and circumstances of the above case is similar to the facts of the present case. Therefore, we have no hesitation to hold that the bar under Sec.205 of the Income Tax Act prevents the department from demanding the tax deducted at source from the assesee who has suffered a deduction. Further more, now the liability rests with the Official Liquidator. Therefore, the Department is at liberty to proceed against the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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