TMI Blog2002 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... t officers of the Income-tax Department. - Once, it is held that the petitioner has been rightly assessed to be an assessee in default, then the liability of tax stands incurred by the petitioner. - - - - - Dated:- 22-2-2002 - Judge(s) : BHAGWATI PRASAD. JUDGMENT BHAGWATI PRASAD J.-The present batch of petitions involve identical questions of law and facts. In this background, they are decided by a common judgment. For the factual matrix, details of the case of Chhogmal Chiranji Lal v. Commissioner of Income-tax, are taken into consideration. In this case, the petitioner has challenged the action of the respondents in issuing the orders annexure 3 and annexure 5. The orders impugned have been passed against the petitioner in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany unless the Assessing Officer is satisfied that such person or principal officer or company, as the case may be, has with out good and sufficient reasons failed to deduct and pay the tax." A show-cause notice was issued to the petitioner on May 26, 1999, deeming him to be an assessee in default in respect of the tax which was required to be deducted by him at source for the financial year 1998-99. In the notice annexure 2, it was said that why the case of the petitioner be not referred to the Commissioner of Income-tax for the levy of penalty. The argument of learned counsel for the petitioner is that notice annexure 2 which requires him to show cause has not clearly recorded that the petitioner is an assessee in default. The rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d issue and has contested that receiving Form No. 15H on April 1, 1999, does not absolve the liability of the petitioner of paying tax. Section 201 of the Act provides a deeming clause that as and when the payer of the interest does not deduct the whole or any part of the tax he will be deemed to be an assessee in default in respect of tax. The exception to it is provided in section 197A(1A) of the Act which reads as under: "(1A) Notwithstanding anything contained in section 193 or section 194A or section 194K, no deduction of tax shall be made under any of the said sections in the case of a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income of the nature referred to in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability of tax, the persons on whose head the liability comes, is under obligation to pay the same. Any intimation or information in that regard is only a ministerial act. The petitioner cannot contend that he was not intimated about the liability of tax. Levy of tax becomes operative with the payment of interest above Rs.2,500 and not receiving Form No. 15H. The petitioner has not charged the tax on payment of interest above the amount of Rs.2,500. He was not given Form No. 15H at that time. Learned counsel for the respondents further submitted that the petitioner is an assessee in default by operation of law as provided in section 201 of the Income-tax Act. Notice annexure 2 was for the purpose of asking the petitioner to show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 24, 2001. The argument of learned counsel for the petitioner was considered and the Commissioner came to the conclusion and held that as per section 194A of the Act while paying the interest, the assessee was required to deduct the tax at source. The petitioner has not received Form No. 15H claiming exemption from payment of tax. Such Form No. 15H appears to have been received by the petitioner on April 1, 1999. It has been concluded by the Commissioner of Income-tax that the day when the interest was credited by the assessee firm, it had not received the Form No. 15H. Under the law, the assessee was required to deduct the tax at source. The admitted position has been noticed by the Commissioner that Form No. 15H was received after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent officers of the Income-tax Department. Once, it is held that the petitioner has been rightly assessed to be an assessee in default, then the liability of tax stands incurred by the petitioner. For an incurred tax liability, the assessees are required to pay the tax. In case, the Department has not issued any notice before passing an order raising demand, then no illegality can be seen in the action of the respondent-Department. No such notice is provided under the Act. Section 201 of the Act clearly states that the petitioner is an assessee in default then, he was required to deposit the tax which he was required to deduct at source. Having not deducted the same, he is required to deposit the amount with the Department. Passing s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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