TMI Blog1999 (10) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... 000. He, therefore, held that there was deficiency of Rs. 2,493. Assessing Officer directed the assessee to pay an amount of Rs. 2,493 plus interest thereon amounting to Rs. 1,277. Assessing Officer also initiated penalty proceedings under section 272A(2) and 271C. 3. On first appeal, ld. counsel submitted that Assessing Officer had erred in directing the assessee to pay amount of Rs. 3,770 as also in initiating penalty proceedings under section 271C/272A(2). Ld. CIT(A) considered the submissions and observed that apparently the assessee had not correctly deducted tax from salary of Kanwar Jasjit Singh and it was, therefore, liable to pay balance tax which was not deducted as also interest thereon, as per provisions of section 201. He als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the employer in respect of tax short deducted. It was also held that it had not been found by ITO and the Tribunal that the assessee's estimate was not honest and fair. The assessee had deducted tax from salary of the employee on salary income honestly estimated by it and had also paid tax as required by section 200. It could not be held to be an assessee in default in respect of the tax. Therefore, the provisions of section 201(1A) also were not attracted. It further held -'.... where the regular assessment of an employee had been completed and the amount of tax was fully paid by him, the ITO (TDS) had no jurisdiction under section 201 to demand further lax from the employer in respect of tax short deducted relating to such employee'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of 'an assessee in default'. This liability is cast upon him under the aforesaid provisions, not because of any order or notice of demand, but because of the operation of the statute itself." (iii) CIT v. Kumudam Publications (P.) Ltd. [1991] 188 ITR 84/55 Taxman 526 (Mad.). wherein it was observed that where lax on amount paid to printer was not deducted and paid to Government, levy of interest under section 201 was justified. Ld. DR further referred to pages 4615-16 of Fourth Edition of Income Tax Law by Chaturvedi Pithisaria, where scope of section 201 has been discussed. He pointed out that section 201 enacted three-fold punishment for non-Government person including a company bound to deduct tax at source and defaulting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in sterling in UK. 4.2 Ld. counsel, in his reply, submitted that ld. DR has not been able to controvert, the decision in Gwalior Rayon Silk Co. Ltd. s case . He further submitted that the decision favourable to the assessee ought to be applied. He submitted that penalties initiated against the assessee under section 272A(2)/271C have been dropped as the assessee had sufficient reasons for short deduction of tax at source. 5. I have carefully considered the submissions made by both the parties and have perused orders of the tax authorities as also written submissions filed before Assessing Officer to which our attention was invited during the course of hearing. It is observed that emphasis of ld. counsel has been that Kanwar Jasjit S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y paid by him, the ITO (TDS) had no jurisdiction under section 201 to demand further tax from the employer in respect of tax short deducted relating to such employee. I feel that the aforesaid decision is on different facts and is not applicable to the facts of the instant case. It is not in dispute that the assessee deducted less tax by an amount of Rs. 2,493. The only defence advanced is that the assessee was misled by request of the concerned employee that he would be depositing Rs. 20,000 in NSS. I feel that it is the duty of the payer of remuneration to the employee to ensure that the employee would have deposited the impugned amount before close of the financial year/period within which tax is to be deducted at source. In case deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
