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TMI Blog2020 (9) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... question is raised in all these appeals and hence they are heard and disposed of together. 2. The assessees have been accepting loans in the form of deposits and paying interest on such borrowings. Even though the assessees were required to deduct tax on the interest paid under section 194A of the Income-tax Act, they have failed to do so. The Assessing Officer proceeded to assess the appellants treating them as assessees-in-default under section 201 of the Income-tax Act. Even though the appellants challenged the assessment orders before the appellate authority, the same were dismissed and further appeals before the Income-tax Appellate Tribunal have also been dismissed as per the orders impugned in these appeals. 3. Heard Sri Harisanka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the principles laid down in Jagran Prakashan Ltd. v. Deputy CIT (TDS) [2012] 345 ITR 288 (All) ? (c) Ought not the learned Tribunal have held that section 201 is found on the instance when the deductee/payee fails to pay the tax on the payment made by the deductor or fails to show the same in the return filed ? (d) Ought not the learned Tribunal have held that the assessing authority passed a vague order in respect of liability of the appellant along with principal officer, partner and managing partner to deduct tax under section 194A ? (e) Are not the findings of the learned Tribunal perverse and against the provisions of the Income-tax Act, 1961 ?" 6. The relevant portions of sections 194A and 201 are extracted below : "194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educt or pay.-(1) Where any per son, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act ; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee-in-default in respect of such tax : Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a paye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person who fails to deduct such tax shall not be deemed to be an assessee-in-default, if it satisfies the conditions stated in the proviso. As per the proviso, the payee in such cases ought to have furnished his return of income under section 139, taking into account such sum for computing income in such return of income, and, paid the tax due on the income declared by him in such return of income. It is also provided that the assessee (deductor) should furnish a certificate to this effect from an accountant in such form, as may be prescribed. Admittedly, the appellants have not furnished any such certificate as required by the statute. Having not complied with the conditions laid down in section 201, the appellants are not entitled to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee direct. The Explanation to the section says that if a person does not deduct the tax as required under the Act and where the assessee has also failed to pay such tax directly, then such person shall without prejudice to any other consequences which he may incur, be deemed to be an assessee-in-default within the meaning of sub-section (1) of section 201. It can thus be seen that there is no requirement under the statute that the Assessing Officer should ensure whether the payee has directly paid tax before declaring the appellants as assessee-in-default. As a matter of fact, the appellants by operation of section 201 will be deemed to be an assessee-in-default, even without any such declaration by the Assessing Officer. 9. The counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pillai reported in [1977] 106 ITR 292 (SC) ; [1977] 1 SCC 431, the hon'ble Supreme Court observed as follows (page 294 of 106 ITR) : "First principles plus the bare text of the statute furnish the best guidelight to understanding the message and meaning of the provisions of law. Thereafter, the sophisticated exercises in precedents and booklore. Here the first thing that we must grasp is that a firm is not a legal person even though it has some attributes of personality. Partnership is a certain relation between persons, the product of agreement to share the profits of a business. 'Firm' is a collective noun, a compendious expression to designate an entity, not a person. In Income-tax law a firm is a unit of assessment, by s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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