1982 (4) TMI 57

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....nt of the court was delivered by SHUKLA J.-This is a reference under section 256(1) of the I.T. Act, 1961. Facts as stated by the Tribunal are as follows: In compliance with the provisions of s. 206 of the I.T. Act the Manager, Madhya Pradesh State Co-operative Development Bank Ltd., filed annual return of salary income in respect of its employees showing the amount of tax deductible unde....

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....al was dismissed by the Appellate Tribunal holding that in the case where the assessment of an employee has been completed by the competent ITO and the tax also has been fully recovered on his assessed income, no action against the employer under s. 201 of the Act can be taken in the light of the scheme of Chap. XVII. At the instance of the department the following question has been referred to th....

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....principal liability for payment of income-tax is, therefore, that of the person who receives income. Chapter XVII of the Act provides for deduction of tax at source. Section 192(1) lays down that any person responsible for paying any income chargeable under the head " Salaries " shall, at the time of payment, deduct income-tax computed on the basis of the rates in force, on the estimated income of....

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.... the amount of tax was fully paid by them. The ITO, Salaries Circle (TDS), could not, therefore, demand further tax from the employer in respect of the income of the employees, which was the salary of the employees chargeable to tax when the same had been fully paid. We, therefore, hold that the Tribunal was right in taking the view that where the regular assessment of an employee had been comp....