Law: Income Tax Act, 1922

Section: 18(2)

Law: Income Tax Act, 1961

Section: 203

Section 203 of the Income-tax Act, 1961 [Corresponding to section 18(2) of the Indian Income-tax Act, 1922] - Deduction of tax at source - Certificate for tax deducted - Petitioner/assessee-company employed one 'R' as its sales manager - Revenue authorities issued notice to petitioner on failure to deduct tax from commission paid to 'R' - Petitioner, thus, filed instant petition contending that notices of certificates referred to principal officer were bad under section 18(9) of 1922 Act as expression 'responsible for paying' means company itself and not principal officer of company - Whether expression 'person responsible for paying' as mentioned in section 18 of 1922 Act includes principal officer of a company - Held, yes - Whether, therefore, notices, in instant case, were validly issued to petitioner-company - Held, yes FACTS The petitioner-company employed one 'R' as a sales manager. In instant writ petition, the company challenged certain assessment orders and certificate proceedings. It was contended by the petitioner-company that the notice of certificates referred to the principal officer were bad under section 18(9) of 1922 Act as the expression "responsible for paying" in this case means the company itself and not the principal officer of the company as described. HELD By an Explanation to section 18 of 1922 Act which was introduced subsequent to the assessments in question, the expression "person responsible for paying" is expressly now included to mean the principal officer of a company. The amendment is only an amendment by way of an explanation saying that the expression, "person responsible for paying" means something. That does not mean that it did not mean that thing before. Besides, on the merits, the actual description in instant case was not merely the particular officer by name. In fact, the name of any particular officer was not given. Therefore, the company itself was also mentioned both in the notice and the certificate. The company always acts through certain human agency. The principal officer is the human agency who under the law generally is the person most competent to act for the company. The whole dispute really centered round…

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