TaxTMI 
TaxTMI 
2021 (3) TMI 324
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....mounting to Rs. 2,04,96,655/- deducted out of income. 2. That under the facts and circumstances of the case, Ld. AO was grossly erred in law by not making any enquiry from the deductor and also not taking any action as prescribed under the Income Tax Act despite several requests made by the assessee and also despite directions given by the CIT (Appeals). 3. That under the facts and circumstances of the case, both the lower authorities grossly erred in not following the orders of the higher authorities. 4. That under the facts and circumstances of the case, Ld. AO grossly erred in adjusting the amount of Rs. 50,00,000/- which was granted as refund by AO, without giving any intimation to that effect." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee, a non-resident Indian holding a British passport, was assessed under section 143 (3) of the Income-tax Act, 1961 (for short 'the Act') vide order dated 29.12.2010 at the total taxable income of Rs. 18,79,45,700/-. Thereafter, he approached the ld. CIT (A) who vide order dated 31.01.2012 has partly allowed the appeal. In the quantum appeal decided vide order dat....
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....to the assessee on the ground that TDS amount has not been deposited in the state exchequer by Koutons Group by returning following findings :- " I have considered the submissions of the appellant as well as the findings of the Ld. AO, higher appellate authorities and the Hon'ble Courts. The Ld. AR has relied on the judicial pronouncement mentioned above. In view of what is stated above it is amply clear that the assessee cannot be treated as 'assessee in default' in respect of non deposit of TDS by Koutons groups and only Koutons groups can be treated as assessee in default in terms of provision of section 201 of the Income Tax Act and tax deducted by them from the long term capital gain on sale of shares by the assessee can only be recovered 'from them. Accordingly in respect of tax demand of Rs. 18,02,937/- the assessee should not be treated as assessee in default. Keeping into consideration the entirety of the facts and circumstances of the appellant's case and the decisions relied on by the Ld. AR I am of the opinion that the AO may take necessary steps for recovery of TOS amount from the deductor as per the provisions of the Act and the assessee ....
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.... vide F.No.275/29/2014-IT(B) dated 11th March, 2016 is categoric enough qua the issue in controversy wherein it is directed that demands created on account of mismatch of credit due to non-payment of TDS amount to the credit of Government by the deductor be not enforced. The Office Memorandum is extracted for ready perusal as under :- "F.No. 275/29/2014-IT (B) Government of India Ministry of Finance Central Board of Direct Taxes (CBDT) New Delhi, Dated: 11th March, 2016 Office Memorandum Sub: Non-deposit of tax deducted at source by the deductor- Recovery of demand against the deductee assessee. Vide letter of even number dated 01.06.2015, the Board had issued directions to the field officers that in case of an assessee whose tax has been deducted at source but not deposited to the Government's account by the deductor, the deductee assessee shall not be called upon to pay the demand to the extent tax has been deducted from his income. It was further specified that section 205 of the Income-tax Act, 1961 puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch in such situations canno....
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....ered the deduction of tax, the mere fact that the deductee did not deposit such tax with the Government revenue could not permit the Income tax Department to recover such amount from the petitioner. 4. The issue is no longer res integra. The Division Bench of this Court in case of Sumit Devendra Rajani (Supra) examined the statutory provisions and in particular Section 205 of the Income-tax Act, 1961. The Court concurred with the view of the Bombay High Court in case of Asst. CIT VS. Om Prakash Gattani, reported in (2000) 242 ITR 638 and observed as under : "10. We are in complete agreement with the view taken by the Bombay High Court and Gauhati High Court. Applying the aforesaid two decisions of the Bombay High Court as well as Gauhati High Court, the facts of the case on hand and even considering Section 205 of the Act action of the respondent in not giving the credit of the tax deducted at source for which form no.16 A have been produced by the assessee - deductee and consequently impugned demand notice issued under Section 221(1) of the Act cannot be sustained. Concerned respondent therefore, is required to be directed to give credit of tax deducted at source....
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....ed as per the directions of Hon'ble Delhi High Court vide order dated 01.12.2011 despite passing order of appeal effect dated 31.01.2012 by the AO and same is liable to be refunded to the assessee along with interest u/s 244A of the Act. 15. Undisputedly, vide order dated 01.12.2011 passed by the Hon'ble High Court of Delhi in Writ Petition (C) 8452/2011 in case of assessee, amount of Rs. 50,00,000/- was deposited on 20.12.2011 and remaining amount of Rs. 50,00,000/- each was to be deposited on 15.02.2012 & 15.04.2012. However, vide order dated 07.03.2012, copy of which is available at pages 19 to 21 of the second paper book, Hon'ble High Court dispensed with the condition of depositing amount of Rs. 50,00,000/- each on or before 15.02.2012 & 15.04.2012. It is also not in dispute that while giving effect to the order dated 31.01.2012 passed by the ld. CIT(A) in quantum appeal filed by the assessee, AO has passed an order dated 27.01.2015 in the form of ITNS-150 making order to refund an amount of Rs. 50,00,000/- along with interest of Rs. 9,25,000/- (total Rs. 59,25,000/-), available at page 10 of the second paper book, which is extracted as under :- 16. When we examine the f....
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....nt does not argue that this amount of Rs. 9 lakhs so deducted is not in tune with the statutory requirements. It appears undisputed that the deductors did not depositing such amount in the Government revenue. Under the circumstances, the petitioner is asked to pay the said sum again, since the department has not recognized this TDS credit in favour of the petitioner. 7. Section 205 of the Act carries the caption "Bar against direct demand on assessee". The section provides that where tax is deducted at the source under the provisions of Chapter XVII, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income. This provision came up for consideration before division bench of this Court in case of Yashpal Sahni v. Rekha Hajarnavis Asstt. CIT [2007] 165 Taxman 144/293 ITR 539. It was a case where the employer while paying salary to the employee had deducted tax at source Rs. 6.66 lakhs. Subsequently, disputes arose between the employer and employee due to which service of the employee was terminated. The employee filed the return of income claiming credit of TDS of Rs. 6.66 lakhs. The Assessing ....
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....d, then under Section 199 of the Act, the assessee from whose income, tax has been deducted at source will not be entitled to take credit of the said amount. In that event, on account of the non availability of the credit, the assessee would be liable to pay tax once again even though the tax was deducted at source. Thus, it would be a case of double taxation which is not permissible in law. To avoid such anomaly, Section 205 has been enacted, to the effect that, once the tax is deducted at source by the employer-company, then, the person from whose income, the tax has been deducted at source shall not be called to pay the said tax again. From the language of Section of 205 of the Act, it is clear that the bar operates as soon as it is established that the tax has been deducted at source and it is wholly irrelevant as to whether the tax deducted at source is paid to the credit of Central Government or not and whether TDS certificate in Form No. 16 has been issued or not. Also the mere fact that the employer may not issue TDS certificate to the employee does not mean that the liability of the employer ceases. The liability to pay income tax if deducted at source is upon the employer....
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....ary income of the petitioner would be sufficient to hold that as per Section 205 of the Act, the revenue cannot recover the TDS amount with interest from the petitioner once again." 8. The situation arising in the present petition is similar. The department does not contend that the petitioner did not suffer deduction of tax at source at the hands of payer, but contends that the same has not been deposited with the Government revenue. As provided under Section 205 of the Act and as elaborated by this Court in case of Yashpal Sahni (supra) under such circumstances the petitioner cannot be asked to pay the same again. It is always open for the department and infact the Act contains sufficient provisions, to make coercive recovery of such unpaid tax from the payer whose primary responsibility is to deposit the same with the Government revenue scrupulously and promptly. If the payer after deducting the tax fails to deposit it in the Government revenue, measures can always be initiated against such payers. 9. Counsel for the revenue is correct in pointing out that for long after issuing notice under Section 266(3) of the Act, petitioner has not brought this fa....
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....========= Document 1 लेखा सं. सà¥.र.स. आयकर संगणना फारà¥à¤® Income Tax Computation Form AN/GIR N. · ABHPS 1536P निरà¥à¤§à¤¾à¤°à¤¿à¤¤ का नाम व पता Name and Address of the Sh. Jagjit WitsSingh 20/56, West Parijabi Bash.. Assessee. HeaDith! निरà¥à¤§à¤¾à¤°à¤£ वरà¥à¤· 2009-10. Assessment Year. कà¥à¤² आप Total Income 10. शà¥à¤¦à¥à¤§ कृषि आय Net Agricultural Income 1 जोड़ (9+10) Total (9+10) 2. उपरà¥à¤¯à¥à¤•à¥à¤¤ (41) पर सकल कर Gross tax on (11) Above. 5) पर कल कर राहत सीमा लिखे। 4. 5. 6. 7. 8. आई. टी. à¤à¤¨. à¤à¤®. 150 I.T.N.S-150 मू....