2023 (12) TMI 63

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.... due for various AYs and which has been illegally adjusted against the illegal and erroneous demand; and/or iii. Issue an appropriate writ, order, or direction to the Respondents to grant statutory interest on the illegally adjusted refund amount of Rs. 3,88,209/-; and/or iv. Issue an appropriate writ, order, or direction to the Respondents to grant compensatory interest on the illegally adjusted refund amount of Rs. 3,88,209/-; and/or v. To issue a writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction, to quash the impugned intimation dated 03.03.2021 (Annexure P/41); and/or vi. To issue a writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction, to quash the impugned intimations dated 02.07.2016 & 12.08.2016(Annexure P/21) for the AY 2016-17, and impugned intimation dated 19.10.2017 (Annexure P/26) for the AY 2017-18, issued under Section 245 of the Act; and/or vii. To issue a writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction, to quash the impugned intimations/orders dated 21.03.2011 (Annexure P/6); dated 23.10.20....

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....owards tax and interest was raised. 2.3 For the Assessment Year 2011-12 also, employer of the petitioner deducted TDS to the tune of Rs. 14,90,055/- from salary of petitioner. On 31.03.2012, petitioner filed his return of income for AY 2011-12 declaring gross total income of Rs. 53,30,384/- and claimed TDS of Rs. 14,90,055/-. On 23.10.2012, the respondents issued intimation under Section 143(1) of the Act, thereby again denying the TDS credit claim of petitioner and raising a demand of Rs. 19,15,807/- towards tax and interest and adjusting a refund of Rs. 24,248/-. 2.4 For AY 2012-13 pertaining to the period from 01.04.2011 to 14.02.2012, employer of the petitioner deducted TDS to the tune of Rs. 13,59,207/-. On 26.03.2013, petitioner filed his return of income for AY 2012-13 declaring gross total income of Rs. 66,11,970/- and declared tax and interest payable at Rs. 19,03,910/-. On 16.01.2014, respondents issued intimation under Section 143(1) of the Act on the ground of unmatched tax deducted at source and raised demand of Rs. 18,16,870/- towards tax and interest. 2.5 The petitioner through his authorized representative filed a rectification application dated 25.02.2014 ....

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....s with reference to his letter dated 27.01.2020, and thereby the respondents refused to cancel the demand or give credit of TDS to him, though a stay on the recovery of outstanding demand was granted till finalization of proceedings. 2.15 Hence, the present petition. 3. The factual position pleaded by the petitioner and admitted by the respondents is that the respondents raised multiple demands of outstanding income tax and interest pertaining to Assessment Years 2009-10, 2011-12 and 2012-13. It is also not in dispute that as reflected from records, the petitioner was being paid salary after deduction of income tax at source but his employer namely Kingfisher Airlines Limited did not deposit the same with the revenue. Despite repeated communications from petitioner, the said demands were not withdrawn by the respondents, so the petitioner approached this court by way of writ action. 4. That being so, the core issue to be considered by us is as to whether any recovery towards the said outstanding tax demand can be effected against the petitioner in view of the admitted position that the tax payable on salary of the petitioner was being regularly deducted at source by his em....

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...., which comes to fore, is as to whether the respondents/revenue can do indirectly what they cannot do directly. 9.1 The adjustment of demand against future refund amounts to an indirect recovery of tax, which is barred under Section 205 of the Act. 9.2 The fact that the instruction merely provides that no coercive measure will be taken against the assessee, in our view, falls short of what is put in place by the legislature via Section 205 of the Act. 10. Therefore, in our view, the petitioner is right inasmuch as neither can the demand qua the tax withheld by the deductor/employer be recovered from him, nor can the same amount be adjusted against the future refund, if any, payable to him." 6. On behalf of revenue, it was contended that no credit for tax can be given to the petitioner, since in view of the provisions under Section 199 of the Income Tax Act the credit can be given only when the tax which was deducted at source is paid to the Central Government and in the present case, admittedly the tax deducted from salary of the petitioner has not been deposited by his employer. This contention was raised also in the case of Sanjay Sudan (supra) but n....