Section 201 cannot be used to recover tax again from an employer once employees' salary tax is fully paid and assessed.

Where salary tax has been deducted at source and the employees' regular assessments are already complete with full tax payment, section 201 cannot be used to raise a further demand against the employer for the same income. The article explains that section 4 fixes the primary tax liability on the recipient of income, while section 192 governs salary deduction at source and section 201 applies only where tax is not deducted or, after deduction, is not paid. On the facts described, further recovery from the employer was not permissible.

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Issues: Whether, where the regular assessment of an employee has been completed and the tax has been fully paid by the employee, the Income-tax Officer can invoke section 201 to demand further tax from the employer on the basis of alleged short deduction at source.

Analysis: Section 4 of the Income-tax Act, 1961 fixes the primary liability to tax on the person receiving income, while Chapter XVII provides for deduction at source. Section 192 requires deduction from salaries on the estimated income of the employee, and section 201 deems the person responsible for deduction to be in default where tax is not deducted or, after deduction, is not paid. On the facts found, tax had in fact been deducted at source and the employees' regular assessments had already been completed with full payment of tax. In that situation, no further demand could be raised against the employer under section 201 in respect of the same salary income.

Conclusion: The Tribunal's view was correct. The Income-tax Officer had no jurisdiction under section 201 to demand further tax from the employer in respect of the employees whose regular assessments were complete and whose tax had been fully paid.

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