INCOME TAX ACT, 1961

Section 205 read with Section 194-IA

Bar against direct demand on assessee - Deduction of tax at source - Validity -

Assessee sold an immovable property and purchasers made a net payment after deducting tax at source at 1 per cent in terms of section 194-IA. Assessee claimed credit of TDS. Department noticed that only part amount was deposited with the Government revenue and, thus, gave the petitioner credit of TDS only to the extent of such sum. A demand was raised against assessee comprising of the principal tax and interest payable thereon. During the pendency of scrutiny assessment, bank account of the assessee was attached. Assessee objected to attachment of bank account on grounds that purchasers deducted the tax at source in terms of section 194IA. Assessee contended that recovery could be made only against the deductor-payee. Held: As provided under section 205, assessee could not be asked to pay same again. It was open to department to make coercive recovery of such unpaid tax from payer whose primary responsibility was to deposit same with Government revenue promptly because, if payer, after deducting tax, fails to deposit it in Government revenue, measures could always be initiated against such payers.

Followed:Yashpal Sahni v. Rekha Hajarnavis, Asstt. CIT (2007) 293 ITR 539 (Bom) : 2007 TaxPub(DT) 1382 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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