TaxTMI 
TaxTMI 
2024 (11) TMI 89
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....Y 2009-10 is Rs. 18,13,250/- and AY 2011-12 is Rs. 1,60,120/-. 5. Brief facts of the case are that: 5.1 The Petitioner was employed by Kingfisher Airlines Limited as a pilot from November 2008 to July 2010. During the Financial Year 2008-09 and 2010-11, the Employer deducted Tax At Source out of the salary of the petitioner Rs. 8,34,099/- and Rs. 3,34,243/- respectively but failed to deposit the same with the Income Tax Authorities. 5.2 For the Assessment Year 2009-10, the Petitioner filed return of income declaring total income of Rs.49,26,000/-on 30.04.2010 claiming the credit of TDS of Rs 8,34,099/-which the employer deducted from the Salary. However, since the employer did not deposit the same with Income Tax Authorities, the return of income filed by the Petitioner was processed u/s 143 (1) of the Income Tax Act,1961 ['the Act' for short] on 13.04.2011 by Jurisdictional Assessing Officer without giving credit for the same and raising demand of Rs. 11,42,390/-. 5.3 Petitioner filed Return of income for subsequent period and the same were processed u/s 143 (1) of the Act. In the event of the refund due to the Petitioner, the same was adjusted against the demand of AY 2009-10....
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.... petition. 6. Learned advocate Mr. Soparkar for the petitioner submitted that there are no outstanding dues for Assessment Years 2009-10 and 2011-12 and therefore, subsequent refund of the petitioner was adjusted against the same demand and notice under section 245 to adjust refund for the Assessment Year 2023-24 is bad in law because in view of the provisions of section 205 of the Act read with Instruction No. 275 dated 01.06.2015 and Office Memorandum dated 11.03.2016, merely because the employer does not deposit the tax deducted from the salary of the employees, the petitioner could not have deprived of the credit of the same. 7. In support of his submissions, reliance was placed on the following decisions: * Kartik Vijaysinh Sonavane vs. Deputy Commissioner of Income Tax, Circle-8 reported in [2021] 132 taxmann.com 293; * Sanjay Sudan vs. Assistant Commissioner of Income tax reported in [2013] 148 taxmann.com 329 (Guj.); * Milan Arvindbhai Patel vs. Assistant Commissioner of Income Tax reported in [2023] 149 taxmann.com 190 (Guj.) 8. On the other hand, learned advocate Mr. Dev Patel for the respondent could not controvert the aforesaid position of law. 9. This Court i....
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....6A issued by the employer deductor - M/s. Amar Remedies Limited has been produced and consequently department is directed to give credit of tax deducted at source to the petitioner assessee - deductee to the extent form no.16 A issued by the deductor have been issued. Consequently, the impugned demand notice dated 6.1.2012 (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 i....
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....ponsible to make the deductions has not deducted the amount at all. It may or may not fall in a different category from one where the amount has been deducted and not made over to the Central Government. We are concerned with the latter category of cases. As indicated earlier, on the facts it is nobody's case that the 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 ....
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....ntion is accepted that credit for tax deducted has to be given on mere deduction of the amount at source, in that event, perhaps, there would be no legal justification to treat the person responsible to deduct the amount at source as an assessee in default in respect of the tax. Once credit on account of payment of tax 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 poi....