Qui Facit Per Alium Facit Perse :

The literal meaning of this maxim is that he who acts through another himself operates
to make the acts of an agent within the scope of his authority, in legal effect the acts of
his Principal. Respondent Superior, doctrine centuries old is predicted on the
assumption that a master, employer or Principal will be held responsible for the act of
the servant employee or agent respectively. The rationale for this view is succinctly
expressed by the maxim Qui Facet Per Alium Facet Perse.

(ii) Qui Facet Per Alium Facit perse , that is that the authorized acts of an agent are
in legal contemplation , the same as the Principals acts and that a Principals tort
liability is based , not on an agency relation , but on the relationships of master and
servant and is expressed by the maxim.

(iii) Therefore as per this maxim Principal is liable personally for the negligence of its
agent . The fundamental duty rests upon every man in managing his /her own affairs,
either by himself//herself or by his/ her agents or servants. But if another person gets
injured as a result of the acts, the principal is liable for the damage.

This maxim was applied in the decision of H.E. Nasser Abdulla Hussain v. DCIT
[2003] 84 ITD 43 (MUM.) wherein the facts were as under:

The assessee was carrying on the activity of breeding of race horses and also racing
them in horse races. During the relevant assessment years, the assessee claimed carry-
forward of losses under the head Racing activity by resorting to the prescription of
section 74A. The Assessing Officer disallowed the claim on the ground that the
assessee himself did not maintain the race horses and the horses were maintained by a
stud farm. The Commissioner (Appeals) confirmed the disallowance.
On second appeal in Tribunal and while relying on this maxim the court held that
what is the purport of the words used in section 74A........"horses MAINTAINED by
HIM for running in horse races?" Can the act of maintenance of horses be done
through others i.e. through the servants and agents of the assessee or the word
maintained by him implies that assessee must maintain the horses by himself.
The assessee owned the horses and these horses were maintained by a stud farm. The
assessee paid the due amount to the firm for the maintenance of race horses. The act
of maintenance comprised of the feeding of horses, brushing the horses, medical
examination of the horses and other incidental activities. It was stated that the
assessee could not do all this work by himself. As such, it was done through others
against payment made for the services. The Tribunal relied on this maxim and held
that It is a well-known tenet of law canonized in the dictum - qui facit per alium,
facit per se (He who does a thing through another, does it himself). The purport of
section 74A(3), is that the assessee must be the owner of the horses and he must
maintain those horses for running in horse races. The interpretation given by the
revenue that the horses must be maintained by the assessee in person led to absurdity.
The text and context of the section is important. An interpretation, which would create
an unfair, irrational or unreasonable result, should be avoided. Construction, which
makes the machinery workable, should be followed. One cannot make a fortress out of
the dictionary. Words in a section are not to be interpreted by having those words in
one hand and the dictionary in the other hand. In spelling out the meaning of the
words in a section, one must take into consideration the setting in which those terms
are used and the purpose they are intended to serve. Statutes have some purpose and
objects to accomplish. The words horses maintained by him should not be construed
to mean that the assessee should personally look after the horses. The principle laid
down in dictum - Qui facit per alium, facit per se is applicable. As such, horses
could be maintained through others also. The assessee appointed a stud farm for the
maintenance of horses. Due amount was paid for maintenance by the assessee. The
consideration for such payment was services offered by the stud farm. As such, it
could be said that the assessee maintained the horses and met with the requirement of
the section 74A(3). The revenue authorities did not interpret correctly the meaning of
the term maintained by him as appeared in the section. The view taken by the
Commissioner (Appeals) was not correct. The Assessing Officer was, therefore,
directed to allow the assessee the benefit of section 74A.

(II) Ultra Vires:

Literally the term means beyond powers. In relation to corporations, an act is

said to be ultra vires when it is beyond the purpose or power of a corporation, when
such acts, though not illegal, are outside the scope of general express or implied
authority, as defined by its charter or by laws or the statute under which it is
incorporated. The term is also used in a secondary sense in respect to corporate acts,
as some- thing beyond the power of the majority to bind dissenting stockholders or
something in violation of the legal rights of creditors, and sometimes in the sense
merely of something beyond the authority of corporate agents or executive officers.
The primary meaning applies only when the public is concerned. The secondary
meaning applies when the issue is between the corporation and its shareholders or
creditors, or other parties dealing with it or between it and its agents or executive
officers.

This maxim was discussed and applied in the case of Rakesh Kumar & Co. v.
Union of India [2009] 178 TAXMAN 481 (PUNJ. & HAR.) wherein the fcts were as
under :
The petitioner was a civil contractor engaged in construction of bridges with
Department of Railways in the State of Jammu & Kashmir. A show-cause notice was
issued requiring the petitioner to explain why disallowance of expenses be not made
under section 40(a)( ia) for its having deducted the TDS but failing to deposit the
same as required under section 200(1).The petitioner filed writ petition challenging
the said notice and also prayed that the provisions of section 40(a)( ia) be declared
ultra vires on the ground that the same are harsh and discriminatory.
Dismissing the Writ Petition, the court held that The Legislature, in exercise of its
taxing power, cannot only provide for levying tax, but it can also provide for penal
action for enforcing the charge, if there is any evasion of tax or statutory liability. No
exception can be taken to incorporation of a provision which excludes right to seek
permissible deduction in the event of failure of the assessee to deduct or to deposit the
deducted tax. Moreover, the proviso relaxes the rigour. If in the subsequent years, one
makes the deduction or makes the deposit, one gets the benefit of deduction. The
provision cannot be held to be harsh. There is no inherent lack of jurisdiction, on the
part of the Legislature in enacting the provision providing for penalty for evasion of
statutory liability. Therefore, the petition was to be dismissed.
Further in the case of CIT v. Shah Electrical Corpn. [1994] 207 ITR 350 (GUJ.)
The ITO imposed a penalty on the assessee under section 140A(3) for non - payment
of the self -assessment-tax. The AAC upheld the view of the ITO that penalty was
payable but reduced the amount of penalty. The Tribunal, following the decision of
the Bombay High Court in CIT v. Godavaridevi Saraf [1978] 113 ITR 589 , held that
the penalty was not sustainable as section 140A(3) was non-existent, it having been
declared as ultra vires by the Madras High Court in A.M. Sali Maricar v. ITO [1973]
90 ITR 116 .
On reference, the revenue contended that the Tribunal decided the appeal on 26-10-
1976 and by that time, the Andhra Pradesh High Court had upheld the validity of
section 140A(3), and, therefore, the Tribunal was not right in quashing the order of
penalty.
HELD
The legal position is correctly stated by the Punjab and Haryana High Court in CIT v.
Ved Prakash [1989] 178 ITR 332, when it observed that "unless and until the Supreme
Court or the High Court of the State in question, under article 226 of the Constitution,
declares a provision of the Act to be ultra vires, it must be taken to be constitutionally
valid and treated as such. "The Tribunal of another State would be justified in
proceeding on the basis that the provision has ceased to exist because it has been
declared as ultra vires by the High Court only when there is some material to show
that the said decision has been accepted by the department. Again, while deciding a
reference, the High Court has to consider the legal position obtaining on the date on
which it is deciding the reference and not the legal position which existed when the
Tribunal decided the appeal. Therefore, the Tribunal was not right in holding that the
penalty imposed by the ITO under section 140A(3) for non-payment of self-assessment
tax was not sustainable.
(III) Ex Visceribus Actus
The Literal meaning of the this maxim is within the four corners of the Act
DCIT v.Vickers Systems International Ltd. [2003] 87 ITD 182 (MUM.)

The assessee-company had paid ex-gratia bonus in excess of 8.33 per cent in the
relevant previous years. The Assessing Officer disallowed the excess amount. On
appeal, the assessee contended that those payments were made as per the agreement
with Workers Union dated 3-7-1985 and the purpose was to buy industrial peace. It
also claimed that the expenditure incurred on ex-gratia payment was to be allowed
under section 37(1) and that as the amount did not exceed 20 per cent of the salary,
that was also allowable under section 36(1)(ii). The Commissioner (Appeals) allowed
the expenditure.
On revenues appeal in Tribunal, Tribunal dismissed the appeal of the revenue by
applying this maxim and held that
From section 37(1) it appeares that it refers to the allowability of only those
expenses, which are not described in sections 30 to 36. It is a general provision. If
some expenditure is described in sections 30 to 36, the same cannot be considered
under section 37(1). That is a residuary provision. If the Act has prescribed any
special provision for the allowability of such expenditure, that special provision will
prevail over the general provision. That is in conformity with the principle enunciated
in the dictum : generalia specilibus non derogant (general things will not derogate
from special things).
In the light of the decision of the jurisdictional High Court in CIT v. Rajaram
Bhandekar & Sons (Shipping) (P.) Ltd. [1999] 237 ITR 628 (Bom.), the claim of the
assessee was not admissible under section 37(1). Special provision contained in
section 36(1)(ii) prevails over the general provision referred to under section 37(1).
The prescription of section 36(1)(ii ) is to be construed as ex visceribus actus, that is
constructions within the four corners of the Act. Nebulous concept of the legislative
intent cannot be used to curtail the explicit provision in a statute
In the instant case, the amount of bonus was reasonable with reference to pay of the
employees and the conditions of their services. It was also reasonable with reference
to the profit of the business. It was established with reference to the records that there
was general practice of making such ex-gratia bonus to the employees. As such, the
assessee complied with the conditions contained in section 36(1)(ii). For the
reasonings adduced in the impugned order, the Commissioner (Appeals) took a
correct view in the matter and his order called for no interference and, accordingly, it
was to be upheld.