TaxTMI 
TaxTMI 
2023 (4) TMI 61
X X X X Extracts X X X X
X X X X Extracts X X X X
....e TDS u/s 194IA of the Act by Mr. Pradeep Ramrakhyani. 4. The assessee filed an appeal before the CIT(A)-NFAC and the CIT (A) - NFAC upheld the action of the CPC by observing as under: "4. The submissions made by the appellant have been given careful consideration. From the details filed by the assessee, it has been noticed that during the year under consideration, the assessee sold his immovable property for a consideration of Rs.10,11,00,000/-. The contention of the assessee is that while making the purchase consideration, the vendee/agreement holder Mr.Pardeep Ramrakhyani had deducted TDS of Rs.10,11,000/- under the provisions of section 1941A of the Act, but the same was not deposited by the vendee into Central Government account and no Form 26B uploaded by him. From the details furnished by the assessee, it is not clear/evident whether the vendee/agreement holder Mr.Pardeep Ramrakhyani had made TDS of Rs.10,11,000/-. it is the plea of the assessee that the said amount or TDS of Rs.10,11,000/- had been deducted but not deposited by the vendee but no documentary evidence has been filed in this regard. To know this fact, a notice was issued on 27.09.2022 which is as under: "....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... amount to the assessee accordingly. The same was affirmed by the Vendee even at page No 6 at Point No.3 of the said registered document which can be taken as a proof that the vendee has deducted the tax component and withheld said TDS amount. Therefore, it is clearly established from the deed which was registered that the vendee has deducted tax at source. As the tax was deducted under section 194lA by the vendee, it is his duty to remit the same, upload Form 26QB and issue TDS certificate in Form No.16B. However, the vendee has not given the required form in Form 16B for deduction of Tax at Source to the assessee in spite of repeated requests before filing the return of income by the assessee and the tax amount is also not appearing in the assesse's Annual Tax Statement. As the tax was already deducted by the vendee from the assessee, the demand raised by the DCIT, CPC at Bangalore against the assessee is not correct and the same should be recovered from the Vendee, Mr. Pradeep Ramrakhyani, as per the provisions of Sec.201 of the Income Tax Act, 1961, as the particulars of the Tax deducted at source for the said amount along with the complete address and PAN of the Vendee is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Counsel for the assessee that once the deductor has deducted the tax at source withholds tax out of payments due/paid to the assessee, but does not deposit the tax withheld by it, the assessee should not suffer for the same and due credit of the TDS is to be given to the assessee and action under the provisions of the Act can be taken against the deductor who after deducting the tax has not deposited the same to the credit of the Central Govt. 11. We find merit in the above arguments of the learned Counsel for the assessee. A perusal of the agreement of sale cum GPA dated 12.02.2019, a copy of which is placed in the paper book, shows that the vendee has deducted an amount of Rs.10,11,000/- as TDS and surcharge @ 1% of the total sale consideration of Rs.10,11,00,000/-. Clause 3 of the said agreement of sale cum GPA reads as under: "3. That an amount of Rs.10,11,000/- have been deducted by the Vendee as TDS and surcharge @ 1% on the total sale consideration of Rs.10,11,00,000/- received by the SRI RAJESH DADU u/s 194-1A of the Income Tax Act, which came into force from 1.06.2013". 12. Under these circumstances, we have to see as to whether the assessee is liable for deposit/p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s due. Consequently, it follows that credit for such tax deducted at source, which is deducted from the account of the deductee, by the deductor, is to be allowed as taxes paid in the hands of the deductee, irrespective of the fact whether the same has been deposited by the deductor to the credit of the Central Government or not. The deductee in such circumstances cannot be denied credit of tax deducted at source on its behalf. Under the Act, the provisions are enshrined under which recovery of tax from the account of the person, who had deducted the such tax, are provided. Accordingly, we hold that where the assessee is able to furnish the necessary details with regard to tax deduction at source out of the amounts due to it, then the action which follows is allowing the credit of such tax deducted at source to the account of the deductee. In case where the deductor deposits the tax deducted at source to the credit of the Central Government and the deduction reflects in Form No.26AS may be on a later date, then it is incumbent upon the assessee to produce the necessary evidence in this regard and it is also the duty of the Assessing Officer to allow such credit of tax deducted at s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid pay slips and bank statements have not been disputed by the revenue. Thus, it is clear that the tax has been deducted at source by the respondent No. 6 from the salary paid to the petitioner. Therefore, the only question to be considered is, if the employer respondent No. 6 has failed to deposit the tax deducted at source from the salary income of the petitioner to the credit of the Central Government, whether the revenue can recover the TDS amount with interest once again from the petitioner? 22. In the present case, though the respondent No. 6 has deducted the tax at source from the salary income of the petitioner, the respondent No. 6 has not issued the TDS certificate in Form No. 16 to the petitioner. As a result, the petitioner is not entitled to avail credit of the tax deducted at source. However, once it is established that the tax has been deducted at source, the bar under Section 205 of the Act comes into operation and the revenue is barred from recovering the TDS amount once again from the employee from whose income, TDS amount has been deducted. It is pertinent to note that the purpose of issuing TDS certificate under Section 203 of the Act is to enable the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the revenue is barred from recovering the TDS amount from the person from whose income, tax has been deducted at source. Therefore, the fact that the revenue is unable to recover the tax deducted at source from the person who has deducted such tax would not entitle the revenue to recover the said amount once again from the employee assessee, in view of the specific bar contained in Section 205 of the Act. 24. As stated earlier, in the present case the petitioner assessee has established that from his salary income, tax has been deducted at source by the employer respondent No. 6 and, therefore, the revenue has to recover the said TDS amount with interest and penalty from the respondent No. 6 alone and the revenue cannot seek to recover the said amount from the petitioner assessee in view of the specific bar contained under Section 205 of the Act. The fact that the petitioner is not entitled to the credit of the tax deducted at source for the non issuance of the TDS certificate by the respondent No. 6, cannot be a ground to recover the amount of tax deducted at source from the petitioner. In other words, even if the credit of the TDS amount is not available to the petitioner asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ain reading of this provision, it is very clear that in a situation where the tax is deductible at source under Section 194-I of the Act, as in the present case, and to the extent to which the tax has been deducted from the income, the assessee shall not be called upon to pay the tax himself/herself to such extent. That means what the section provides for is to put an embargo or prohibition from raising a demand on the assessee in respect of the amount, which was deductible and actually deducted to the extent it has been deducted. The section by itself does not say that the amount should also be paid to the Central Government. There is no doubt that such an obligation is cast on the person responsible namely, the person who has deducted the amount and the Act also provides for initiation of proceedings against the person on his/her failure to do so, right upto the prosecution of the person for recovery of the amount with interest. The condition of remittance is not referred to or made a requirement for the protection to the assessee under Section 205 of the Act. Even if one reads the earlier provisions such as 192, 194-I, 199, 200, 201, 202 and 203 to presume that payment being on ....