TMI Blog1995 (3) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... tain the varacity of the returns survey was conducted. It was found that while calculating salaries for TDS purposes correct prescription of law was not followed. As a result thereof, lesser amount was deducted. Attention was invited on the following: (i) reimbursement of driver's salary to some employees taxed under s. 17(2)(iv); (ii) ex gratia, equivalent to one month salary, paid to employees drawing salary above Rs. 1,500 per month taxed under s. 17(1); (iii) office set off expenditure allowance paid to certain officers as a fixed allowance ranging between Rs. 75 to Rs. 200 per month taxed under s. 17(1). Besides, in the standard deduction in respect of employees provided with motor car for use otherwise than wholly and excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) CIT vs. Shri Synthetics Ltd. (1984) 39 CTR (MP) 72 : (1985) 151 ITR 634 (MP). 6. The learned Departmental Representative, Shri A.K. Sahay, appeared before us. It was vehemently argued that the case of the assessee comes within the mischief of s. 201(1) r/w s. 192(1) of the IT Act, 1961. It was contended that law prescribes that the assessee should deduct tax as per the provisions of this Act. The blatant error made by the assessee in calculating the salary income cannot go to exonerate it from the liability. It was stated that AO has only charged short deduction. Further, he relied on the orders of the Revenue authorities. 7. We have heard the rival submissions in the light of the materials placed before us and the precedents r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of s. 201. Sec. 192(1) requires that the employer deduct the amount of tax on the estimated income of his employee. Therefore, duty is cast upon the employer to form an opinion about the tax liability of his employee in respect of the salary income. While forming this opinion, the employer is expected to act honestly and fairly. It is laid down in the case of Gwalior Rayon Silk Co. Ltd. that if it is found that the estimate made by the employer is incorrect, this fact alone, without anything more, would not inevitably lead to the inference that the employer has not acted honestly and fairly—unless the inference can be reasonably raised against an employer, no fault can be found with him. 9.1 In the case of New India Assuranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athered, we find that the assessee made honest estimate. No mala fide was attributed to the assessee in regard to the estimate. The assessee also filed annual return under s. 206 of the Act. He also made the payment to the exchequer within the stipulated time. Therefore, we find that the assessee discharged his duties as cast upon him as per the provisions of law. Admittedly the employees are assessed separately and shortfall, if there be any, was said to have been considered in the assessment of the employees. Having regard to the facts and considering carefully the precedents available over the point, we are of the opinion that the AO had no jurisdiction under s. 201 of the Act, to demand further tax from the assessee in respect of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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