TaxTMI 
TaxTMI 
1980 (12) TMI 1
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....the Tribunal in ITA No. 483 (Coch) of 1977-78 : " (1) Whether, on the facts and circumstances of the case, the assessee would have deducted the tax relating to Rs. 8,112 paid to Mr. McLean by the assessee being the passage money for the journey of his two children who were studying, and residing in U.K. ? (2) Whether, on the facts and circumstances of the case, the order passed by the Income-tax Officer on December 21, 1976, under section 201 of the Income-tax Act, 1961, was in time and not barred by limitation ? " The assessee, a company owning tea estates, had employed Mr. A. J. McLean a, manager of one of the estates owned by it. The company had paid to Mr. McLean a sum of Rs. 8,112 being the passage money for the journey of his....
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....mount of Rs. 8,112 paid to Mr. McLean, since the dates of the journeys of the children were within a period of one year, either way from the date of Mr. McLean's journey on home leave. It was further contended that the proceedings initiated under section 201 were barred by limitation and hence it should be dropped. The Income-tax Officer overruled the aforesaid contentions and passed an order dated December 21, 1976, treating the assessee-company as a person in default under section 201 of the Act and requiring it to pay Rs. 6,217 being the tax said to be due on the amount of Rs. 8,112 aforementioned paid to Mr. McLean. Aggrieved by the said order, the assessee preferred an appeal to the Appellate Assistant Commissioner reiterating the c....
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.... to pay the tax after deducting it at source from the salary of the employee, section 201 provides that the person who commits such failure shall, without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default in respect of the tax. The purpose underlying the scheme of sections 192 and 201 is to safeguard the interests of the Revenue by ensuring that the tax that may be assessed against an employee is recovered by the process of deduction at source from the salary payable to the employee and in the event of failure by the employer to effect such deduction or to make payment to the Department after having made such deduction from the salary, the employer will be treated as an assessee in default.....
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....ded to consider on the merits the point as to whether the sum of Rs. 8,112 was or was not exempt from taxability under section 10(6)(i)(a) of the Act. The approach made by the Tribunal to a consideration of the merits of the question concerning the taxability of the sum Rs. 8,112 without first addressing itself to the crucial question as to whether the initiation of the proceedings against the assessee under section 201 was warranted in law on the basis of the admitted facts that were available before it was clearly illegal and the order passed by the Tribunal cannot, therefore, be regarded as evidencing a proper and valid disposal of the appeal. As already indicated, the question referred in this case would arise for consideration by the T....