In this article the author draw a need for important push in the discharge of withholding tax obligations given under Chapter XVII of the Income tax Act, 1961 for a better corporate governance. He wants to caution the companies and also other specified persons to be responsive to their mandatory duty to deduct tax without any favour or help.
Calcutta High Court Proposition- Limited Application
The Calcutta High Court in Grindlays Bank Ltd. Vs. Commissioner of Income-tax (193ITR457) in the context of default in relation to deduction of tax under section 192 of the income tax Act, 1961 held that if the amount of tax has already been realized from the employees concerned directly, there cannot be any question of further realization of tax as the same income cannot be taxed twice. If the tax has been realized once, it cannot be realized once again
Madras ITAT Unfolds the law correctly
In the case of Madras ITAT in Income-tax Officer vs. Kodaikanal Finance Ltd. (55ITD480) the revenue went in appeal against the order of Commissioner (Appeals) allowing relief to the assessee in an action for levy of interest u/s 201(1A) for non deduction of tax on interest payments on the basis of production by the assessee of certificates from the various recipients of interest for all the years to the effect that the interest income payable by the respondent-assessee had been included in the return of income filed by them for the relevant assessment years and they have not claimed any credit for tax deducted at source that should have been deducted at source by the respondent-assessee. On the basis of this assertion or the certificates and relying on the observation of the Calcutta High Court in the case of British Airways v. CIT  193 ITR 439, to the effect that the interest under section 201(1A) will stop running when the amount of tax that should have been deducted at source is actually paid by the employer or by the employee because section 201 makes it clear that the deduction of tax at source is only one mode of recovery of tax and is without prejudice to any other mode of recovery and