TMI Blog1996 (3) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd. v. CIT [1987] 166 ITR 278, had an occasion to consider the question and its answer. However, the learned senior tax counsel having urged that the question did not directly arise, strenuously persuaded us to carefully consider the said decision of this court. We will consider the submissions keeping in mind the basic features of the law of precedents. It is fundamental that the courts of co-ordinate jurisdiction bind each other. The theory of judicial precedents has an intrinsic internal and interrelated judicial strength, in the process of underlying thread of judicial discipline. The binding nature of the judgment of a court of co-ordinate jurisdiction has also an element of implicit faith and respect strong enough to bind simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablishment of the plant. In fact the project report as regards preparation was also a part of the agreement. The company agreed to pay in all Rs. 5.5 lakhs and under the terms, 30 per cent. of the project fees were required to be paid in advance and accordingly the assessee-company remitted Rs. 1,65,000 as advance payment of the project report fees. There is no dispute that with regard to the payment of this Rs. 1,65,000 no tax was deducted at source as required under the taxation law. Nor was it remitted by the assessee-company, undisputedly in any capacity as the agent, which was initially the position, ultimately making it clear that the assessee-company was liable under the law and not as an agent. While going through the records, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible was not actually deducted. Treating the assessee being in default accordingly, as a consequence the appellate authority found it justifiable as regards the levy of interest under section 201(1A) on the amount of tax due from the assessee. With regard to the quantum relating to both the tax and interest the order was confirmed. The Income-tax Appellate Tribunal, Cochin Bench, particularly in paragraph 5 considered that the remittance was made in the year ending on March 31, 1980. The Tribunal observed that the order under section 201(1A) was passed on May 24, 1982. In the context, the Tribunal considered the question of limitation under section 231 of the Act seeking support of a binding nature, from the decision of this court in Trac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible for deduction of tax at source in terms of section 195 is deemed to be in default if he does not either deduct the tax at source, or having deducted it, does not pay it as required by section 200 within the time prescribed under rule 30. Thereafter it is observed that section 201 further shows that the failure of such a person makes him an assessee in default, although he would not, but for the default, be an assessee in respect of the sum referred to in section 195. It is thereafter observed that it is his failure to discharge his statutory obligation that visits him with the liability of " an assessee in default ". This liability is cast upon him under the aforesaid provisions, the observation continues not because of any order or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation of tax directly payable by the person earning the income and whose liability arises only upon demand. In analysing the rigour of section 231 in regard to the above situation it is observed that the period begins to run from the last day of the financial year in which the demand is made. Thereafter, the second limb is taken up for consideration in relation to the statutory liability of a person de hors the notice of demand and in regard thereto it is carefully emphasized that such liability arises by operation of law and has nothing by way of relation to any demand in regard thereto. It is observed that the period of limitation relating to such liabilities begin to run not with reference to any notice of demand but from the last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible to the date on which such tax is actually paid. In the submission of learned counsel the words in section 201(1A) "such tax is actually paid" in the context would have to be read as "such tax ought to have been paid". In support reliance is placed on the decision of the Supreme Court in Gursahai Saigal v. CIT [1963] 48 ITR 1 (SC) relating to the situation of liability to pay interest as regards an assessee failing to submit the estimate of his income and pay advance tax under the then section 18A(3) of the Indian Income-tax Act, 1922, in regard to which the Supreme Court justifiably read the date to be the date on or before which the tax ought to have been paid. In our judgment, the factual peculiarities as stated at the outset show ..... X X X X Extracts X X X X X X X X Extracts X X X X
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