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Section 201 of the Income-tax Act, 1961 - Deduction of tax at source - Consequence of failure to deduct or pay - In its annual return filed by assessee-company under section 206, ITO found amount of tax short deducted in respect of certain employees and, consequently, demanded additional tax under section 201 from assessee - Whether where regular assessment of an employee had been completed and amount of tax fully paid by him, ITO had no jurisdiction under section 201 to demand further tax from employer in respect of tax short deducted relating to such employee - Held, yes Facts The assessee-company filed its annual return of salary income in respect of its employees snowing the amount of tax deductible under section 192. The ITO found that the tax deductible under section 192 was not properly deducted by the assessee in respect of some of its employees. The ITO, accordingly, recomputed the income and demanded under section 201 additional tax that should have been deducted at source. However, in the meanwhile, regular assessment of the employees had been completed and the amount of tax due was fully paid by them. The Commissioner (Appeals), however, allowed the assessee'* appeal against the ITO's order and the Tribunal upheld the order of the Commissioner (Appeals). On reference: Held In view of the decisions of the Madhya Pradesh High Court in the cases of Gwalior Rayon Silk Co. Ltd. v. CIT [1983] 140ITR 832 andCIT v. Divisional Manager, New India Assurance Co. Ltd. [1983] 140 ITR 818 , in the instant case, the Tribunal was justified in holding that where regular assessment of an employee had been completed and the amount of tax fully paid by him, the ITO had no jurisdiction under section 201 to demand further tax from the assessee in respect of the tax short deducted relating to such employee. Cases referred to Gwalior Rayon Silk Co. Ltd v. CIT [1983] 140 ITR 832 (MP) and CIT v. Divisional Manager, New India Assurance Co. Ltd. [1983]140 ITR 818 (MP). R.C. Mukati for the Applicant. S.N. Kohli for the Respondent. ORDER Sohani, Actg. CJ. - By this reference under section 256(1) of the Income-tax Act, 1961 ('the Act'), the Tribunal, Indore Bench, has referred the…

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