9911796707
TMI Blog2014 (9) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... Motors Services Limited, who had deducted tax while paying the rent, but failed to issue TDS Certificate as well as credit the amount to Income Tax Department. 3. The Assessee, while filing a return, submitted that the tenant has not furnished TDS Certificate as per the requirement of the Income Tax Act and therefore, they are entitled for such deduction as it has already been deducted to the tune of Rs. 2,75,700/-. 4. However, the Assessing Officer has not given credit to the said amount being the tax deducted at source by Union Motors Services Limited as the appellant did not furnish the TDS Certificate for this amount. The assessee has filed an appeal against such Assessment Order before the Commissioner of Income Tax (Appeal). The Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of law are raised, We are inclined to take the third substantial question of law, which will answer the other questions. 8. Pending appeal, the Official Liquidator, High Court, Madras was impleaded as party in view of the litigation proceedings initiated against Union Motors, who was the tenant. 9. The learned counsel for the assessee submitted that there is a bar under Sec.205 of the Income tax Act, demanding any tax from the assessee, when the tax has already been deducted at source. The learned counsel relied on the following case laws: (2005) 278 ITR 206 (Smt.Ansuya Alva vs Deputy Commissioner of Income Tax) (2007) 293 ITR 539 (Bom) (Yashpal Sahni vs Rekha Hajarnavis, Asst. CIT (Bom.) 10. On the other hand, the learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be called upon to pay the tax himself to the extent to which tax has been deducted from that income". 16. The plain reading of the section makes it clear that whenever tax is deductible under the provisions of this Act and where the tax has already been deducted, no demand can be raised on the deductee. This implies that to the extent of TDS, demand cannot be raised on the deductee. However, for the failure on the part of the deductor, suitable provisions are available in section 201 and other sections mentioned supra. 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete machinery to recover the tax deducted at source from the person who has deducted it. 18. At this stage, 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 205 of the Act is also in consonance with the general principles of law, particularly 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct from enforcing any demand on the assessee-petitioner insofar 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." 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. Furthermore, now the liability rests with the Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
