TaxTMI 
TaxTMI 
2023 (11) TMI 1396
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....ng the appeal which was stated to be on account of the assessee being out of station and filing of the appeal only after returning to the station. After hearing the rival contentions and perusing the material on record we find that the appeal is for sufficient reasons and therefore, the same is condoned. 3. The only issue raised by the assessee in various grounds of appeal is against the order of Ld. CIT(A) upholding the order of the Assessing Officer (in short ld. 'AO'), CPC passed u/s 143(1) of the Act dated 26.06.2018 wherein the credit for TDS deducted at source by the employer of Rs. 3,96,700/- was not allowed. 4. The facts in brief are that the assessee is a salaried employee employed with M/s. Falcon Tyres Ltd. at its K....
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.... passed u/s 143(1) of the Act dated 26.06.2018 thereby raising a demand of Rs. 4,18,720/-. Ld. CIT(A) simply affirmed the order of the AO by holding that since the TDS deducted at source has not been deposited in the Government treasury by the employer, the assessee is not entitled to claim the credit thereof. In our opinion, where the TDS has been deducted at source from the salary which has not been deposited with the Government treasury, then assessee cannot be called upon to deposit the demand arising out of non-credit of the said TDS by the Revenue. The case of the assessee is supported by the departmental Circular F.No. 275/29/2014-IT (B) which is extracted below for the ready reference: "F.No. 275/29/2014-IT (B) Government of I....
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.... supported by a series of decisions namely Incredible Unique Buildcon Private Limited vs. ITO reported in No.-W.P.(C) 7797/2023 order dated 31.05.2023 and Coordinate Bench Pune in the case of Mukesh Padamchand Sogani vs. ACIT in ITA No. 29/PUN/2022 order dated 30.01.2023. 8. In all the above decisions, the issue of non-deposit of TDS by the deductor has been allowed in favour of the assessee by holding that once the TDS is deducted then the liability resulting from the non-deposit of TDS by the deductor cannot be fasten on the deductee. For the sake of convenience, we are reproducing herein the operative part of the decision in the case of Mukesh Padamchand Sogani (supra) wherein the Coordinate Bench under the similar circumstances has h....
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....ause (c) then comes into operation, which provides for determining the amount payable or refundable to the assessee after adjusting the amount of any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable u/s.89 etc. from the amount of tax determined under clause (b). Essence of clause (c) of section 143(1) is to allow adjustment of tax deducted or collected at source or advance tax etc. against the tax liability on total income. Important thing to be borne in mind in this regard is that though the word paid' has been used after the words 'advance tax', but it is absent in the context of 'tax deducted at source'. The effect of this is that unlike advance tax, the credit for tax deducted a....
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.... amount of income-tax which would be deductible or collectible at source during the said financial year ....'. Effect of the above provision is that if there is an income on which tax is deductible at source, then such income will be reduced for determining the advance tax liability and the consequential interest liability u/s 234B of the Act, even if no tax was actually deducted at source. The Finance Act, 2012 inserted a proviso to section 209(1) nullifying the above position of deducting income on which tax is deductible but not actually deducted. Instantly, we are confronted with a situation in which the deductor has duly deducted tax at source but not paid the same to the exchequer. Albeit gap between 'tax which would be deductible....