TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 1618
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....14 -IT(B), dated 11-3-2016 stating that in case of an assessee whose tax has been deducted at source but not deposited to the Government's account by the deductor, the deductee assessee shall not be called upon to pay the demand to the extent tax has been deducted from his income which is also specified in Section 205 of the Income-tax Act, 1961. 4. The learned CIT(A) erred in not following the ratio laid down by Gujarat High Court in the case of Kartik Vijaysinh Sonavane v. Deputy Commissioner of Income-tax wherein it was held that "TDS having been deducted by employer of assessee, it will always been open for department to recover same from said employer and credit of same could not have been denied to assessee" 5. On the facts and Circumstance of the Case and in law, the learned CIT(A) ought to have appreciated that Salary income amounting to Rs. 31,70,690 for the Period January 2019 to March 2019 should not have been charged to tax Considering the concept of "real income theory" as your appellant has not received such salary income till date. 6. On the facts and circumstances of the case and in law, the learned CIT(A) erred in not staying the recovery....
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..... However, the Ld. CIT(A), NFAC did not accept the contention of the assessee and held as under: - "5.1 The main contention of the appellant is non-granting of TDS credit of Rs. 15,85, 989/- 5.2. The assessment order, the submissions of the appellant and the provisions of law have been examined and considered. As per details available and the submissions of the appellant, the appellant, working as Captain with Jet Airways (India) Ltd during the year, was in receipt of salary from his employer. The employer during the FY 2018-19 has deducted an amount of Rs. 44,74,793/- as TDS on the appellant's salary. However, due to certain reasons the employer has deposited TDS only of Rs. 28,88,804/-. The balance TDS amount of Rs. 15,85,989/- representing TDS on Salary payable for the period December 2018 to March 2019 was not deposited to the Government treasury though it was deducted for the salary income. Due to the nondeposit of TDs by the Employer, the appellant could not get credit of such TDS in its Form 26AS. The appellant filed Return of Income of Rs. 1,29,57,500/- and claimed TDS credit of Rs. 44,74,793/-. The return of income was processed u/s 143(1) ac....
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.... been deducted by the said employer, the AO/CPC was effectively collecting the said tax from him, which was actually payable by the employer who had unjustly withheld the said amount but did not deposit it to the Government. The Ld. CIT(A) had upheld this action of AO/CPC because he was of the view that since the Jet Airways/employer has not deposited the TDS of Rs.15,85,989/-, the assessee could not be allowed its credit. 7. It is noted that the assessee had offered to tax his entire salary income which was due to him, in terms of Section 15 to 17 of the Act although he had not received three months salary from his employer. Based on the salary slips issued to him, which reflected the amount of TDS deducted by the employer, the assessee had claimed credit of TDS in the return of income. The employer however did not pay the full taxes withheld by them to the credit of the Government. Hence the question before us is whether the AO/CPC was right in denying the credit of the TDS to the employee to the extent not paid by the employer (which was deducted from the salary of the employee). In this regard, we note that Chapter XVII of the Act provides for collection and recovery of taxe....
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....ute. As noted, the petitioner sold an immovable property for sale consideration of Rs.9 crores. The purchasers paid only Rs. 8 crores 91 lakhs retaining Rs. 9 lakhs towards TDS. The department does not argue that this amount of Rs.9 lakhs so deducted is not in tune with the statutory requirements. It appears undisputed that the deductors did not depositing such amount in the Government revenue. Under the circumstances, the petitioner is asked to pay the said sum again, since the department has not recognized this TDS credit in favour of the petitioner. 7. Section 205 of the Act carries the caption "Bar against direct demand on assessee". The section provides that where tax is deducted at the source under the provisions of Chapter XVII, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income. This provision came up for consideration before division bench of this Court in case of Yashpal Sahni v. Rekha Hajarnavis Asstt. CIT [2007] 165Taxman 144/293 ITR 539. It was a case where the employer while paying salary to the employee had deducted tax at source Rs.6.66 lakhs. Subsequently, disputes arose between the em....
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....er Section 203 of the Act is to enable the assessee to avail credit of the tax deducted at source in the relevant assessment year. If the TDS certificate is not issued, then under Section 199 of the Act, the assessee from whose income, tax has been deducted at source will not be entitled to take credit of the said amount. In that event, on account of the non availability of the credit, the assessee would be liable to pay tax once again even though the tax was deducted at source. Thus, it would be a case of double taxation which is not permissible in law. To avoid such anomaly, Section 205 has been enacted, to the effect that, once the tax is deducted at source by the employer-company, then, the person from whose income, the tax has been deducted at source shall not be called to pay the said tax again. From the language of Section of 205 of the Act, it is clear that the bar operates as soon as it is established that the tax has been deducted at source and it is wholly irrelevant as to whether the tax deducted at source is paid to the credit of Central Government or not and whether TDS certificate in Form No. 16 has been issued or not. Also the mere fact that the employer may not iss....
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.... credit of the TDS amount is not available to the petitioner assessee for want of TDS certificate, the fact that the tax has been deducted at source from salary income of the petitioner would be sufficient to hold that as per Section 205 of the Act, the revenue cannot recover the TDS amount with interest from the petitioner once again." 8. The situation arising in the present petition is similar. The department does not contend that the petitioner did not suffer deduction of tax at source at the hands of payer, but contends that the same has not been deposited with the Government revenue. As provided under Section 205 of the Act and as elaborated by this Court in case of Yashpal Sahni (supra) under such circumstances the petitioner cannot be asked to pay the same again. It is always open for the department and infact the Act contains sufficient provisions, to make coercive recovery of such unpaid tax from the payer whose primary responsibility is to deposit the same with the Government revenue scrupulously and promptly. If the payer after deducting the tax fails to deposit it in the Government revenue, measures can always be initiated against such payers [emphasis....