TaxTMI 
TaxTMI 
2021 (11) TMI 682
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2014 with the following prayers: - "(A) Issue a writ of certiorari and/or a writ of mandamus and/or any other writ direction or order directing the respondent to cancel the outstanding demand as reflected on IT Portal at Annexure- C and to cancel the unjust demand raised by the respondent by issuance of recovery notices dated 19.11.2013 at Annexure - F, notices dated 21.08.2014 at Annexure - J (Colly) and notice issued on 22.12.2015 at Annexure -K; (B) Issue a writ of certiorari and/or a writ of mandamus and/or any other writ direction or order directing the respondent to cancel the outstanding demand as reflected on IT Portal at Annexure-C and to cancel unjust demand raised by the respondent by issuance of recovery notices dated 19.11.2013 at Annexure -F, notices dated 21.08.2014 at Annexure- J (Colly) and notice issued on 22.12.2015 at Annexure- K, and to return the amount already adjusted by the respondent along with statutory interest. (C) Award the cost of this petition. (D) Grant such other and further reliefs as this Hon'ble Court deems fit." 3. It is averred that the petitioner had filed the return of income for the assessment years 2009-10 and 2011-12 and he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be sustained. 4.2. According to the respondent, it is not in dispute that the petitioner was working as an employee with the Kingfisher Airlines and the employer deducted the amount of TDS from his salary for the assessment years 2009-10 and 2011-12, but has failed to discharge the liability of depositing the same. In absence of any TDS reflected in the system, which is averred to have been deducted by the deductor, and his failure to submit even Form-16 issued by them for the assessment year 2011-12, would also not entitle him to get the TDS credit. 4.3. It is thus the say of the respondent that in the present case, the system of Income Tax Department would not allow such credit on the TDS in absence of the deposit of the TDS by the deductor, the demand notice had been issued. 5. Rejoinder affidavit also has been filed which may not be required further elaboration. 6. We have heard learned advocate Mr. Darshan Patel appearing for the petitioner and learned Senior Standing Counsel Mr. Varun Patel appearing for the respondent. 7. The factual matrix presented before this Court has not been disputed. It is also not being disputed that the case is no longer res integra and is cove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1.2012 (Annexure D) is quashed and set aside. However, it is clarified and observed that if the department is of the opinion deductor has not deposited the said amount of tax deducted at source, it will always been open for the department to recover the same from the deductor. Rule is made absolutely to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs." 5. Facts in both case are very similar. Under the circumstances, by allowing these petitions we hold that the Department cannot deny the benefit of tax deducted at source by the employer of the petitioner during the relevant financial years. Credit of such tax would be given to the petitioner for the respective years. If there has been any recovery or adjustment out of the refunds of the later years, the same shall be returned to the petitioner with statutory interest." 8. In case of Om Prakash Gattani (supra) Gauhati High Court was dealing with the TDS not deposited of prize money payable to the petitioner. It held and observed thus: - "13. From a perusal of the provisions quoted above relating to the deduction of tax at source in the matters relating to prize money of lot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e amount was actually not deducted at source by Chandra Agencies. What seems to be in dispute is the deposit of the said amount in the account of the Central Government. The Income-tax Department seems to have made enquiries about the exact date of payment to the Central Government which Chandra Agencies could not furnish on the ground that the papers were forwarded to the chairman of Vaibhavshali Bumper. In such a category of cases we feel that the amount of tax can be recovered by the Income-tax Department treating the person responsible to deduct tax at source as an assessee in default in respect of the tax. It would not be possible to proceed to recover the amount of tax from the assessee. The assessee cannot be doubly saddled with the tax liability. Deduction of tax at source is only one of the modes of recovery of tax.. Once this mode is adopted and by virtue of the statutory provisions the person responsible to deduct the tax at source deducts the amount, only that mode should be pursued for the purpose of recovery of tax liability and the assessee should not be subjected to other modes of recovery of tax by recovering the amount once again to satisfy the tax liability. It i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is given, the tax liability will stand discharged. Any step to recover the amount of tax can be taken only in case the tax liability is not discharged and it still subsists. In this view of the matter, Shri K. P. Sarma, learned counsel appearing for the Revenue, has rightly defended the note appended by the Assessing Officer in the order of assessment making it clear that credit for the amount deducted was not being given and that will be given only when evidence as to actual payment of the amount to the Central Government is furnished. But this position would not legally justify initiation of recovery proceedings against the assessee from whose income tax has been deducted at source, but the person responsible to deduct the tax fails to deposit the same in the Government treasury. The statutory scheme evolved to employ this mode of recovery of tax at source also points to the same position and in our view rightly. Otherwise a taxpayer from whose income tax is liable to be deducted at source would be exposed to a great vulnerable position. If some unscrupulous persons responsible to deduct the tax at source, after deducting the amount do not deposit the amount in the Government tre....