TaxTMI 
TaxTMI 
1988 (7) TMI 104
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...., 1961. This grievance of the assessee arises out of the following factual background. 2. The assessee before us is Delhi Development Authority through the Pay and Accounts Officer, Engineering Wing. The Pay and Accounts Officer was required to deduct tax from the salaries paid to the employees of DDA and pay the same into the Govt. Treasury as required under the law. The assessee had thereafter to file a return under section 206 of the Income-tax Act, 1961 showing salaries paid to the employees and the tax deducted thereon. On examination of such a return filed by the assessee the Income-tax Officer concerned found that the assessee had not deducted full tax due from two of the employees as under : -----------------------------------....
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....lan on11-4-1985demanding total tax of Rs. 4,944 (Rs. 2023 + Rs. 1921). 3. On receipt of the above order from the Income-tax Officer the assessee filed an appeal before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, it was submitted that the amount of Rs. 3023, "in respect of Shri Khamani was not deducted at source owing to the fact that an undertaking was furnished by the officer to the effect that he would deposit this amount at the time of filing of his income-tax return". The learned Appellate Assistant Commissioner was also informed that this undertaking given by the officer concerned was fulfilled by payment of the disputed amount on2-7-1984into the State Bank ofIndia, Indraprastha Estate. The lea....
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....ause payment by the employee is independent of the consideration whether the employer failed to deducted and pay the tax as required under law. He submitted that the failure to deduct and pay the tax is admitted even in the arguments raised before us and, therefore, there cannot be any question of not treating the assessee as assessee in default under section 201(1) of the Act. The learned Departmental Representative also emphasised that the authorities relied upon on behalf of the assessee are distinguishable in so far as the facts were different and in each case the assessment of the employee had been completed and tax paid. He, therefore, fully supported the orders of the authorities below. 6. We have given careful consideration to th....
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....x and incorporates a provision that any person deducting any sum in accordance with the provisions of Section 192, etc. shall pay within the prescribed time the sum so deducted to the credit of Central Government or as the Board directs. It is section 201 which lays down the consequences of such failure to deduct or pay the tax and it is this section that the Income-tax Officer invoked leading to the present proceedings. 8. Section 201(1) lays down that if any such person and in the cases referred to in section 194 the principal officer and the company of which he is the principal officer does not deduct or after deducting fails to pay the tax as required by or under this Act, be or it shall, without prejudice to any other consequences w....
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....sition is placed upon the judgment of the M. P. High Court which we have noted supra in the arguments of the counsel for the assessee. We, however, find that on the facts of the case the explanation of the assessee is not acceptable. We have noted certain detail the provisions regarding deduction of tax and payment thereof into the treasury with a purpose in mind. The Legislature has provided this elaborate scheme and has gone to the extent of providing penalty upon the persons who are in default to ensure that taxes due on salaries, etc. are duly accounted for by the persons responsible for payment of salaries. We, however, find that the assessee knowingly flouted these provisions in so far as the failure of the assessee to deduct tax of R....