TaxTMI 
TaxTMI 
1984 (4) TMI 94
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....d been paid to the contractors for binding bidis on which tax should have been deducted at source and deposited to the account of the State under section 194C of the Act which the assessee failed to do. He, accordingly, issued a notice to the assessee to show cause as to why interest under section 201(1A) should not be levied. The assessee failed to respond and, accordingly, he treated the assessee to be a defaulter in the payment of tax to the tune of Rs. 5,428, being 2 per cent of the total payment to the contractors, and, accordingly, directed payment of interest on this amount for the period from 1-4-1977 to 30-4-1979 which he calculated at Rs. 2,008. Similarly, for the second year it was noticed that the assessee had paid a sum of Rs. ....
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....ne doubt and controversy whether the assessee came within the purview of section 194C at all and, therefore, the assessee could not be held liable for interest. We agree with the representative of the department that some of the observations of the Commissioner (Appeals) are not correct in law. If a person is liable for deduction of any amount as income-tax under section 194C and fails to do so, he would ordinarily be liable to be declared as an assessee in default and also to pay penal interest under section 201(1A). Whether the assessee knew of his obligations under the Act would not be very material because the liability is imposed by law but it does not mean that in each case where the ITO chooses to hold an assessee to be responsible f....
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.... of other members of the family including children. The Bidi Workers (Conditions of Employment) Act itself recognises a system where the manufacturer is called the principal employer and the munshi or contractor as defined in section 2(a) of the said Act. The labour is really engaged on behalf of the manufacturer, i.e., the principal employer, and it is for the manufacturer who happens to be the trade mark holder. The legislation was intended to achieve welfare, benefits and amenities for the labour. The manufacturer or the trade mark holder becomes principal employer though he engages the labour through the contractor. He cannot escape liability by stating that he had engaged the labour through the contractor. No doubt, technically speakin....
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....) would be simultaneous because section 201(1) deals with the consequences of the assessee having failed to deduct and deposit tax under section 194 and sub-section (1A) deals with the peculiar aspect of these consequences, namely, the liability to pay interest. An order under section 201 is appealable under clause (b) of section 246(1) of the Act. In fact, the ITO's order purports to be also under section 201(1) because therein he has also stated that the assessee was a defaulter in payment of tax which implied the assessee's liability under section 201(1) also. He has also directed the assessee to deposit the sums of tax to the credit of the Central Government which would imply some sort of action under section 201(1) as well. The case ci....