CESC LTD Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) THE appellant is an assessee under the Income -tax Act, 1961. The appellant employs several persons in employment. Under Section 206 of the said Act of 1961 the appellant is bound to deduct tax at source from the respective employees on the basis of their estimated salary income. It is the case of the appellant that they duly deducted at source the tax from the respective employees out of their salary income on tentative basis and deposited the same with the appropriate authority and submitted Form No. 24 as required for the said purpose.

(2.) THE Central Government for the purpose of looking after the mode of recovery through tax deduction at source from time to time by notification entrusted several officials who are usually called as Income -tax Officer (TDS). As per a 1989 circular officers were appointed for the said purpose. There had been a further circular in this regard in 1996 which was almost identical to the 1989 circular as there was no change in respect of the subject controversy. However, in 1999 the Central Government issued a further circular by which the TDS officials were also empowered to make queries from the employer under Section 131 which was usually the power of the Assessing Officer. Such power was not expressly given by the Central Government prior to 1999.

(3.) THE appellant filed the instant writ petition in 1996 challenging the authority and propriety of the tax deducted at source officials to make such queries which was otherwise entrusted to the Assessing Officers. It was the case of the appellant before the learned single judge (CESC Ltd. v. ITO : [2005]272ITR513(Cal) ), that the power so enjoyed by the Assessing Officers under Section 131 was not given to the TDS officials and as such the queries made by the TDS officials were without jurisdiction.