Section 192 of the Income Tax Act
The decision most relied on for Section 192 is 254 ITR 121 (Guj) ITO v. Gujarat Narmada Valley Fertilizers Co. Ltd. (243 ITR 435), cited in 173 of the 185 judgments on BharatTax that turn on this section.
Leading authorities on Section 192
Section 201 is attracted only when an employer fails to deduct or pay tax on employee salaries as required by the Act. An employer has a duty to make an honest and fair estimate of the employee's tax liability when deducting TDS on salary income.
An employer is not an 'assessee in default' under Section 201(1) if short or non-deduction of TDS on employee salaries or exempt income was due to a bona fide belief. The Assessing Officer must compute TDS liability based on the employee's actual income, and no interest under Section 201(1A) is leviable when such a bona fide belief exists.
An employer is not statutorily obligated to collect evidence from employees regarding the actual utilization of amounts paid towards leave travel concession or conveyance allowance, unless specific requirements are mandated by law or a CBDT circular.
An order that dismisses grounds of appeal based on a single issue, thereby disobeying the mandates of section 250(6) of the Income-tax Act, 1961, is not a lawful adjudication and is irregular, making it a fit case for remand.
A decree or proceeding initiated by an authority without jurisdiction is a nullity, void ab initio, and its invalidity can be raised at any stage, including in collateral proceedings or for the first time on appeal, as a defect of jurisdiction cannot be cured even by consent.
An appellate authority, including the Income-tax Appellate Tribunal (ITAT), must adjudicate appeals strictly within the confines of the law and cannot travel beyond its statutory provisions. Actions taken by an appellate authority exceeding its legal jurisdiction are void.
The Delhi High Court's decision in Centrica India Offshore (P.) Ltd. v. CIT is often cited as an unfavourable precedent in subsequent judgments, particularly in cases involving international taxation and transfer pricing.
Expenses incurred and reimbursed for seconded employees under a secondment agreement are not liable to tax deduction at source and do not constitute 'fees for technical services'. The secondment agreement itself forms an independent arrangement for securing services.
The applicability of a tax treaty can determine the levy of surcharge on income. When a tax treaty is decided in favour of the assessee, related grounds of appeal concerning surcharge may not require separate adjudication.
Judgments on Section 192
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