Law:

Section:

Section 201 of the Income-tax Act, 1961 - Deduction of tax at source - Consequences of failure to deduct or pay - Assessee-company paid certain amount of passage money to one of its employees - While completing assessment on that employee, ITO did not include impugned passage money in that employee's total income - Assessee did not deduct any tax at source on that impugned amount - Whether in view of fact that assessment of aforesaid employee had become final assessee could be treated as a person in default under section 201 in respect of abovementioned amount - Held, no Facts In the relevant year, the assessee-company paid to its employee 'A' certain amount as passage money for the journey of his two children from abroad to India and back. In the assessment of 'A' for the relevant assessment year, the ITO treated impugned passage amount as not includible in the total income of 'A' in view of section 10(6)(i)( a) and completed assessment. The assessee had been deducting tax at source and remitting the same to the department. But in doing so, the company had not included the said sum in the total income for the purpose of computation of tax and had not deducted tax on this amount at source. In the assessment of the assessee for the said year, the ITO treated the assessee as a person in default under section 201 and required it to pay tax and surcharge due on the impugned amount. On appeal, the Tribunal set aside the order of the ITO, inter alia, holding that the ITO had no jurisdiction to invoke section 201 against the company since the assessment against the employee was completed and the same had become final and could not have been reopened. On reference: Held The provisions regarding deduction of tax at source and payment of tax so deducted to the revenue lay down only a mode of recovering tax due from the employee. In other words, the duty on the employer is not an end in itself. It is only a means to an end, viz., recovery of tax payable by the employee. Tax paid over to the revenue after deduction by the employer is for and on behalf of the employee. This is subject to the ultimate assessment to be made on the employee and the tax so deducted and paid is…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492