TaxTMI 
TaxTMI 
2016 (3) TMI 246
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....1 ((hereinafter referred to as 'the Act'), instituted against the petitioner, which is a department of the State Government, constituted to construct and maintain roads and bridges in the State of Bihar, the respondent No. 3 herein, namely, Assistant Commissioner of Income Tax, TDS Circle, Patna, held that the petitioner had not deducted income tax, at source, on the payments made to Bihar Rajya Pul Nirman Nigam Limited and Bihar State Road Development Corporation Limited ((hereinafter referred to as 'the Corporations') for the period 2012-13, 2013-14 and 2014- 15 and, therefore, raised a demand of Rs. 4,07,33,189/-, Rs. 50,99,60,809/- and Rs. 63,51,95,228/- for the period 2012-13, 2013-14 and 2014-15 respectively. 2. Agg....
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.... of the whole amount, in dispute, totaling to a sum of Rs. 1,18,58,89,226/-. 4. Though the appeal is still pending for consideration by the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, this writ application has been made, under Article 226 of the Constitution of India, by the petitioner seeking, inter alia, issuance of a writ or writs setting aside and quashing the notice, dated 22.09.2015, as contained in Annexure-4, issued by the respondent No. 3, namely, Assistant Commissioner of Income Tax, TDS Circle, Patna, under Section 226(3) of the Income Tax Act, 1961, raising the demand as aforementioned for the period 2012-13, 2013-14 and 2014-15. 5. We have heard Mr. D. V. Pathy, learned Counsel, appearing for ....
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....ed from attachment. 7. Appearing on behalf of the respondents, Ms. Archana Sinha @ Archana Shahi, learned Counsel, has not been able to dispute that in terms of the assessment made by the said two Corporations, taxes have been paid. 8. In the circumstances indicated above, does it remain legally open to the respondents to insist on the demands, which have been raised and which stand impugned in the statutory appeal, which the petitioner has filed? Yet another question is : If, in terms of the assessments, made by the said two Corporations, the Corporations have already paid taxes, is it legally valid and justified for the respondents to continue to keep under attachment the account of the petitioner maintained with the District Treasu....
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....rce, by the deductor (i.e., the petitioner), such payments will not only absolve the deductees, but also the deductor. This position, emerging from the Circular aforementioned, has been amply clarified by the Supreme Court by pointing out, in Hindustan Coca Cola Beverate P. Ltd. v. Commissioner of Income-Tax, reported in, [2007] 293 ITR 226 (SC), that when there is no dispute that the tax due has already been paid by the deductee-assessee, a proceeding, under Section 201(1) of the Income Tax Act, 1961, read with Section 201(1A) thereof, is untenable and, therefore, cannot be continued against the deductor. 12. Giving the Circular, dated 29.01.1997 aforementioned, issued by the Central Board of Direct Taxes, a statutory recognition, a pro....
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....er section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.]" 13. In the light of the proviso to Clause (b) of subsection (1) of Section 201 of the Act, there can be no escape from the conclusion that if the person, who fails to deduct, whole or part of the tax, at source, shall not be deemed to be an assessee in default if in respect of such tax, the deductee has furnished his return of income under Section 139 of the Act and, while furnishing the return, has taken into account such sum for computing income in such return of income and has paid the tax due on the income declared by him in such return of income coupled with a cert....