Agent of non-resident cannot face separate TDS default liability under section 201 for the same payments.

An assessee already liable to be assessed as agent of a non-resident under section 163 could not be subjected again to tax-deduction-at-source liability under section 195(1) or treated as an assessee in default under section 201 for the same payments. The statutory scheme was read to prevent the revenue from recovering the same tax in two different forms, and section 161(2) was treated as a complete answer to the attempt to impose duplicative consequences. On the facts, where the assessee's position as agent remained the same throughout the relevant years, the court held that the TDS default provisions did not apply. The question was answered in the negative, in favour of the assessee.

---

---

Issues: Whether an assessee already liable to be taxed as agent of a non-resident can also be proceeded against for failure to deduct tax at source under section 195(1) and treated as an assessee in default under section 201 of the Income-tax Act, 1961.

Analysis: The reference proceeded on the footing that the assessee was the agent of the non-resident throughout the relevant period. On that basis, the statutory scheme was examined and it was held that liability to be assessed as agent under section 163 and the obligation to deduct tax at source under section 195(1) could not simultaneously operate in the same manner so as to expose the assessee again to default consequences under section 201. The Tribunal's view was accepted that section 161(2) furnished a complete answer to the revenue's attempt to recover tax twice over in different forms. The conclusion was supported by the identity of facts across the years and by the view that the same assessee cannot be treated both as an agent for assessment and as a defaulter for non-deduction on the same payments.

Conclusion: The assessee, being liable as agent of the non-resident, was not liable to be saddled with a further obligation to deduct tax at source under section 195(1) or to be deemed an assessee in default under section 201. The question was answered in the negative, in favour of the assessee.

---