TMI Blog2014 (2) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... arat Sanchar Nigam Limited (2013 (3) TMI 199 - PUNJAB & HARYANA HIGH COURT). During the course of remanded proceeding s the Assessing Officer shall examine this aspect of the matter as well. - Decided in favour of assessee. - ITA Nos.372, 373 & 374/Agra/2013 - - - Dated:- 26-2-2014 - SHRI BHAVNESH SAINI, AND SHRI PRAMOD KUMAR JJ. Appellant by : Shri J.L. Verma Shri Anil Verma, Advocates Respondent by : Smt. Anuradha, Jr. D.R. ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: These three appeals filed by the assessee are directed against the consolidated order dated 22.08.2013 passed by the ld. CIT(A)-II, Agra in the matter of demands raised under section 201/201(1A) read with section 194H of the Income Tax Act, 1961, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es have not paid the taxes on income embedded in the amounts in question. In this background, we are of the considered view that the matter deserves to be sent back to the file of A.O. for reconsideration in the light of following observations made by the Co-ordinate Bench in due deference to Hon ble Allahabad High Court s judgement in the case of Jagran Prakashan Limited vs. DCIT (2012) 21 taxman.com 489 (All), in the case of ICICI Bank Limited vs. DCIT, 156 TTJ 569:- 6. It is, however, important to bear in mind the settled legal position that a short deduction of tax at source, by itself does not result in a legally sustainable demand u/s 201(1) and u/s 201(1A). As held by Hon'ble Supreme Court in the case of Hindustan Coca Cola Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e persons to whom payments have been made are on record, it is for the Assessing Officer, who has al l the powers to requisition the information from such payers and from the income tax authorities, to ascertain whether or not taxes have been paid by the persons in receipt of the amounts from which taxes have not been withheld. As a result of the judgment of Hon ble Allahabad High Court in Jagran Prakashan s case (supra), there is a paradigm shift in the manner in which recovery provisions under section 201(1) can be invoked. As observed by Their Lordships, the provisions of Section 201(1) cannot be invoked and the tax deductor cannot be treated an assessee in default till it is found that assessee has also failed to pay such tax directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question of making good the loss of revenue arises only when there is indeed a loss of revenue and the loss of revenue can be there only when recipient of income has not paid tax. Therefore, recover y provisions under section 201(1) can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due taxes thereon. In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same. The provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact. On the other hand, once assessee furnishes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessing Officer for fresh adjudication in accordance with the law and in the light of our observations above. While doing so, the Assessing Officer will give a due and fair opportunity of hearing to the assessee and dispose of the matter by way of a speaking order. We direct so. 4. The ld. Departmental Representative did not have much to say beyond placing her reliance on the orders of the authorities below and contending that on merit of the case the assessee ought to have deducted tax at source. That plea of hers is not relevant in the above context in as much as TDS liability is only a vicarious liability. In the circumstances in which principal liability is discharged, vicarious liability does not survive. In any event, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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