Tax Deduction at Source: employer identification by principal officer is valid and private agreements do not negate the duty to deduct tax.

Whether notices and certificates addressed to the principal officer sufficiently identified the person responsible for paying was resolved by treating the combined designation of "principal officer" and the company name as adequate identification, so such notices were valid under the statutory scheme. Separately, the employer's statutory duty to deduct tax at source on payments treated as salary cannot be negated by a private agreement with the employee; the company remained liable to deduct tax on commission payments notwithstanding an internal arrangement shifting payment of tax to the employee.

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Issues: (i) Whether notices and certificates addressed to "The Principal Officer, M/s. John Patterson and Co. Ltd." were invalid under section 18(9) of the Income-tax Act, 1922; (ii) Whether the petitioner company was liable under section 18(2) to deduct tax on commissions paid to its employee R.W. Baddley and whether a private agreement between the company and Baddley absolved the company of that statutory liability.

Issue (i): Validity of notices and certificates addressed to the principal officer of the company under section 18(9) of the Income-tax Act, 1922.

Analysis: The description used included both the designation "Principal Officer" and the company name, thereby identifying the corporate payor together with its human agency. The later statutory explanation clarifying that "person responsible for paying" includes the principal officer only codified a meaning that the notices and certificates already conveyed in substance. A subsequent explanatory amendment does not retroactively alter whether the earlier description sufficiently identified the responsible payor.

Conclusion: The notices and certificates were not invalid under section 18(9) of the Income-tax Act, 1922.

Issue (ii): Liability of the company to deduct tax on commission payments and effect of a private agreement by the employee to pay tax.

Analysis: The company, in its statutory returns, treated the commission and bonus as components of salary, indicating awareness that such payments were chargeable as salary. Section 18(2) imposes a statutory duty on the person responsible for making payments to deduct tax at source; private arrangements between employer and employee do not alter or relieve that statutory duty. The company's internal agreement with the employee does not affect the income-tax authorities' right to hold the company liable under the statute.

Conclusion: The petitioner company was liable under section 18(2) of the Income-tax Act, 1922 to deduct tax on the commission paid to Baddley, and the private agreement did not absolve the company of that statutory obligation. The petition is dismissed.

Ratio Decidendi: A person responsible for paying salary includes the principal officer acting for a company and the statutory duty to deduct tax at source under the Income-tax Act cannot be negated by private agreements between employer and employee.

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