Case Law Details
Pr. CIT Vs Jasjit Singh (Delhi High Court)
Delhi High Court held that the Income Tax Act does not seem to cast a burden on the deductee/payee with regard to the deposit of money, which is retained as tax, by the payer i.e., the deductor.
Facts- The appellant/revenue, while conceding that no direct recovery could be made against the respondent/assessee concerning the tax at source deducted by the Koutons Group amounting to Rs.2,04,96,655/-, says that credit for the said amount, sought by the respondent/assessee, could not be given since the deductor, i.e., Koutons Group had not deposited the said amount with the appellant/revenue.
Conclusion- Specifically, the grossing up principle finds statutory recognition in Section 198 of the Act. This is a principle, whereby, income which is payable, say, under any agreement/arrangement [in a case not referred to in Section 192(IA), and the tax chargeable on that income is required to be deducted by the payor, then the income is increased by the payor/deductor and offered to tax inclusive of the tax deducted at source.
Held that the Income Tax Act does not seem to cast a burden on the deductee/payee with regard to the deposit of money, which is retained as tax, by the payer i.e., the deductor. Therefore, insofar as the deductee/payee is concerned, once the payer/deductor, who acts as an agent of the Central Government, has retained money towards tax, credit for the same cannot be denied, having regard to the consequences and the modes available for recovering the said amount from the payer/deductor.
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