Firm accepted loans in the form of deposits and paid interest on such borrowings but did not deduct tax under S.  194A on the interest paid. The AO treated the assessees as assessees-in-default under S.  201 . The assessees challenged the assessment orders before the appellate authority, but the appeals were dismissed and further appeals before the Tribunal were also dismissed. Dismissing the appeal the Court held that

The burden to prove that the payee had paid the tax, which the assessee as deductor had failed to deduct was placed on the latter, by production of a certificate from the accountant. The assessees had not furnished any certificate from the accountant as required by the statute. Having not complied with the conditions laid down in S.  201 the assessees were not entitled to contend that they should not be treated as assessees-in-default under the section. Jagran Prakashan Ltd. v. Dy.CIT (TDS) ( 2012) 345 ITR 288 (All) (HC) distinguished. Court also held that the assessees’ contention that the authorities could not have fixed the liability on the assessee and its partners and thereafter issued the demand only against the managing director. The action of the authorities was not illegal or inappropriate. The liability of a firm is the liability of its partners. A demand raised on the managing partner could never be visualised as a wrong fixation of liability. It was only a demand made on the person who was managing the affairs of the firm, for and on behalf of all its partners. Such a demand did not in any way amount to a conclusion that the claim against the other partners had been given up, since the liability of the partners was joint and several. There was no perversity in the findings of the Tribunal It is settled law that a partnership has no separate existence from its partners. A demand raised on the managing partner does not in any way mean that the claim against the other partners has been given up, since the liability of the partners is joint and several. ( AY.2013-14 to 2016-17)