2024 (10) TMI 762 - HC - Income Tax

Tax Notices Overturned for AY 2009-12; Court Directs Revenue to Process Refunds Due to Favorable Prior Decisions.

The HC set aside the impugned notices and orders under Section 245 of the Income Tax Act, 1961, concerning AY 2009-10, 2010-11, and 2011-12, as previous ... Tax Deducted at Source (TDS) - Adjustment of outstanding demand - Intimation under Section 245 - Recovery of TDS from employee - Refund and consequential orders - Binding effect of Coordinate Bench precedentTax Deducted at Source (TDS) - Adjustment of outstanding demand - Intimation under Section 245 - Binding effect of Coordinate Bench precedent - Refund and consequential orders - Adjustment of outstanding demands reflected in the impugned intimation dated 10.01.2019 in respect of AY 2009-10, AY 2010-11 and AY 2011-12 was not permissible and was set aside. - HELD THAT: - The petitioner had TDS deducted by the employer and the amounts were reflected in Form 16A. The Revenue issued an intimation under Section 245 recording adjustments across multiple assessment years, including 2009-10, 2010-11 and 2011-12. The Court observed that the question of adjustment in respect of those assessment years is covered in favour of the petitioner by the earlier decision of the Coordinate Bench in Sanjay Sudan v. The Assistant Commissioner of Income Tax & Another, and accordingly the impugned notices and order were set aside insofar as they effected adjustments for AY 2009-10, AY 2010-11 and AY 2011-12. The Court directed the Revenue to pass necessary consequential orders and to process refunds of amounts due if already adjusted. The petitioner did not challenge, and had accepted, the adjustment in respect of AY 2017-18. [Paras 10, 11]Impugned intimation and notices set aside in respect of adjustments for AY 2009-10, AY 2010-11 and AY 2011-12; Revenue to pass consequential orders and process refunds if applicable.Final Conclusion: The petition is allowed by setting aside the adjustments of demand in the impugned intimation dated 10.01.2019 insofar as they relate to AY 2009-10, AY 2010-11 and AY 2011-12; consequent orders and refunds, if any, shall follow. Issues:Challenge to intimation and notice under Section 245 of the Income Tax Act, 1961 regarding outstanding demand for TDS not deposited by employer, adjustment of demands for various assessment years, applicability of Section 205 of the Income Tax Act, 1961, interpretation of Form 16A, legality of adjustments made by the Revenue, previous court decisions on similar matters.Analysis:The petitioner challenged an intimation and notice under Section 245 of the Income Tax Act, 1961, regarding an outstanding demand of Rs. 11,07,970/- for TDS not deposited by the employer for assessment years 2009-10 and 2011-12. The petitioner argued that the Revenue cannot recover TDS from him due to Section 205 of the Act and government instructions. The petitioner was a Co-Pilot whose employer had deducted TDS from his salary but failed to deposit it with the tax authorities. The TDS amount was reflected in Form 16A, and the petitioner contended that he should not be liable for this tax deduction.The Revenue pointed out adjustments made for different assessment years in a tabular statement attached to the notice. The adjustments were for AY 2009-10, AY 2010-11, AY 2011-12, and AY 2017-18. The Revenue argued that adjustments for AY 2009-10, 2010-11, and 2011-12 were covered in favor of the petitioner by a previous court decision. However, the adjustment for AY 2017-18 was permissible as it was a recoverable amount. The petitioner did not challenge the adjustment for AY 2017-18, which had been paid.The court noted that the issue of adjustments for AY 2009-10, 2010-11, and 2011-12 was already decided in favor of the petitioner in a previous court decision. Therefore, the impugned notices and order were set aside for these assessment years, and the Revenue was directed to process any refund due. The petitioner's challenge was limited to the earlier assessment years, and the court allowed the petition accordingly. The pending application was also disposed of in light of the judgment.