Person responsible for Deduction of Income-Tax on salaries for Companies
Rule:
Section 204 states that “in the case of payments of income chargeable under the head "Salaries", other than payments by the Central Government or the Government of a State, the employer himself or, if the employer is a company, the company itself, including the principal officer thereof”.
Section 2(35) states who is principal officer as follows:-
"principal officer", used with reference to a local authority or a company or any other public body or any association of persons or any body of individuals, means—
(a) the secretary, treasurer, manager or agent of the authority, company, association or body, or
(b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of his intention of treating him as the principal officer thereof ;
Further, Section 2 (20) of the Income-tax Act, 1961, defines who is manager as follows:-
"director", "manager" and "managing agent", in relation to a company, have the meanings respectively assigned to them in the Companies Act, 195614 (1 of 1956) ;
Section 2(24) of Companies Act, 1956, defines who is manager, as given below
"manager" means an individual (not being the managing agent) who, subject to the superintendence, control and direction of the Board of directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, and whether under a contract of service or not;
Analysis & Conclusion
In effect in case of a company, the director(s) or a person who has been appointed by the board to occupy such position becomes the principal officer who is the person responsible for the deductions and required to sign Form 16 issued.
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