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2016 (4) TMI 1048 - AT - Income TaxTDS u/s 192 - Non deduction of tds - assessee in default in respect of salary remaining unpaid to its employees till the end of the relevant assessment year - Held that:- In view of the express provision of S. 192, the Assessee cannot be deemed to be in default under S. 201(1) and S. 201(1A) to this extent. The liability to deposit sum, not deducted or collected, with the Govt. treasury does not arise under Chapter XVII-B of the Act read with Rule 30(2) of the Income Tax Rules 1962. Thus, the action of the Assessing Officer under section 201(1) & 201(1A) imposing liability towards unpaid salary is without authority of law. As a sequel to these aforesaid observations, We do not find any merit in the plea of the Revenue that liability to deposit the tax arises simply because provision thereof has been made in the books of account. It is trite that the determination of tax liability depends upon the provisions of law relating to it and mere book entries made in this regard are not conclusive. As a corollary, patent mistake has been committed by the AO in applying the statutory provisions of S. 192 while framing impugned order which is rectifiable under S. 154. In this view of the matter, we direct the Assessing Officer not to hold the assessee as assessee in default under section 201(1) & 201(1A) of the Act in respect of TDS liability attributable to unpaid salary. While computing the revised liability for default under S. 201(1) & 201(1A), however, the Assessing Officer shall be at liberty to satisfy himself about the arithmetical correctness of quantum of outstanding salary remaining unpaid at the end of the year qua the total salary expenditure incurred by the Assessee in pursuit of its own business for the year in consideration and shall give suitable relief in terms of direction above.
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