PRASANTA BEHARI MUKHERJEE, J. - This is an application by John Patterson & Co. (India) Ltd. under article 226 of the Constitution for a writ of certiorari and mandamus challenging certain income-tax assessment orders and certificate proceedings. The dispute arises with regard to the assessment of R. W. Baddley, an employee of the petitioner. He was employed as a sales manager on a monthly salary of Rs 750 and a commission of 1 1/2 per cent. on the total sales.
The only point urged by the learned advocate for the petitioner is that the notices of the certificates referred to 'The Principal Officer, M/s. John Patterson and Co. (1) Ltd. (a/c R. W. Baddley)' and was, therefore, bad under section 18(9) of the Indian Income-tax Act, which provided that 'Every person deducting income-tax..... shall at the time of payment of the sum from which tax has been deducted furnish to the person to whom such payment is made a certificate to the effect that income-tax.... has been deducted and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed'. It is argued that the expression 'person responsible for paying' in this case means the company itself and not the principal officer of the company as described. The point is too technical to be either sound or good. By an explanation to section 18, which was introduced subsequent to the assessments in question, the expression 'person responsible for paying' is expressly now included to mean the principal officer of a company. It is said that the subsequent amendment of the law cannot affect the proceedings before the amendment took place. I am not impressed by that argument because the amendment is only an amendment by way of an explanation saying that the expression, 'person responsible for paying' means something. That does not mean that it did not mean that thing before. Besides, on the merits, the actual description in this case was not merely the particular officer by name. In fact, the name of any particular officer was not given. What was given was the description 'The Principal Officer, M/s. John Patterson and Co. (1) Ltd.' Therefore, the company itself was also mentioned both in the notice and the certificate. The company always act through certain human agency. The principal officer is the human agency who under the law generally is the person most competent to act for the company.
Reliance was placed on an old decision of the East Punjab High Court in Janda Rubber Works Ltd. v. Income-tax Officer In that case, the argument was the other way about. The argument was that the company as such could not be called upon to pay and the principal officer should be the person who should be named. The court repelled that argument by holding that the work 'person' in section 18 of the Income-tax Act included the company. I do not think that case at all helps the petitioners present argument before me.
The whole dispute really centers round the tax liability for a commission paid to Baddley. The responsibility was of the company to deduct it. In fact, the petitioner company in the annual returns under section 21 of the Indian Income-tax Act submitted in Form I.T. 4 expressly showed the salary and the commission as heads for assessment. It is, therefore, clear that the petitioner company was fully aware that the said commission and bonus which were paid to Baddley in addition to his salary were chargeable under the head, 'salary'. I do not think on those facts the petitioner company can escape the liability.
Lastly, the petitioner company has pleaded in the petition a letter dated the 2nd December, 1946, from Baddley himself that he would pay the income-tax on the commission which he had earned and he would undertake to deal direct with the Income-tax Department. That agreement, however, cannot affect the right of the income-tax authorities to make the company liable for payment. Whatever the private arrangements between the company and its sales manager Baddley may be, the companys liability under the statute is clear. No arrangement or agreement privately arrived at between the petitioner and Baddley can affect or alter or modify the statutory liability of the petitioner under section 18(2) of the Indian Income-tax Act to deduct tax at the appropriate rate from the payments made to Baddley.
As no other point was urged before me, this petition must fail. The rule is, therefore, discharged. Interim order, if any, is vacated. There will be no order as to costs.