TaxTMI 
TaxTMI 
2026 (6) TMI 738
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....risdiction Case No. 626 of 2026) For the Petitioner: Mr. D.V. Pathy, Sr. Advocate, Mr. Sadashiv Tiwari, Advocate, Mr. Hiresh Karan, Advocate, Ms. Shivani Dewalla, Advocate. For the Department: Ms. Archana Sinha @ Archana Shahi, Sr. SC Ms. Shilpi Keshri, Jr. SC. Ms. Swarna Roy, Advocate For the Bank: Mr. Rajan Ghoshrave, Advocate. ORAL JUDGMENT (PER: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) Heard learned senior counsel for the petitioner(s) and learned Senior Standing Counsel for the Department of Income Tax as well as learned Advocate for the Punjab National Bank. 2. This batch of writ applications contains common questions to be considered by this Court. We are taking CWJC No. 381 of 2026 (Sharda Construction versus Principal Chief Commissioner of Income Tax (TDS), Patna and Ors.) as the lead case. 3. The petitioner prays for the following reliefs:- "i) For issue of a writ of mandamus or any other appropriate writ (s) to the respondent no. 2 to give credit to the tax deducted at source and paid into the Government account statutorily admissible in computing the tax liability under Section 199 of the Income Tax Act, 1961 (hereinafter called the ....
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....s. 2,25,301/- was deposited in the Government account. A copy of the certificate issued by the Bank (Respondent No. 3) has been brought on record as Annexure 'P/3 Series'. 7. It is stated that the Assistant Commissioner of Income Tax, TDS Circle has initiated proceeding under Section 201(1A) of the Act against the Respondent Nos. 3 and 4 calling upon them as to why the TDS was not deposited in the Government account. The Respondents has been asked to show cause as to why a statutory interest and penalty be not imposed against them for the default. Submissions on behalf of the Petitioner(s) 8. Learned senior counsel for the petitioner(s) submits that once the certificate of deduction of income tax at source has been issued by Respondent Nos. 3 and 4 in respect of depositing of tax in the Government account, it is incumbent upon Respondent No. 2 to credit the same in computing the total income. The grievance of the petitioner is that Respondent No. 2, while making the assessment, did not take notice of the certificate and other evidence as regards deduction of income tax at source. It is submitted that the petitioner has been denied a rightful claim of refund which was other....
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....me in the Government account. The said Respondent has also issued a certificate to that effect giving details of deductions and deposit thereof. 12. In CWJC No. 435 of 2026 (Debashree Construction India Pvt. Ltd versus Principal Chief Commissioner of Income Tax (TDS), Patna and Ors.), the matter relates to the assessment year 2012-13. In this case, Respondent No. 3 has deducted a sum of Rs. 1,19,928/- and issued a certificate (Annexure 'P/3') saying that the amount of tax has been deposited in the Government account. 13. In CWJC No. 440 of 2026 (Kaushal Kumar Singh versus Principal Chief Commissioner of Income Tax (TDS), Patna and Ors.), the petitioner has prayed for a writ in the nature of Mandamus directing Respondent No. 2 to give credit to the tax deducted at source and paid into the Government account by the Bank (Respondent No. 3). The matter pertains to the assessment year 2012-13. In this case also the Bank has issued certificate certifying that the amount of tax deducted at source amounting to Rs. 1,49,819/- was deposited in the Government account. 14. In CWJC No. 579 of 2026 (Sharda Construction versus Principal Chief Commissioner of Income Tax (TDS), Income Tax ....
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....under Section 203 of the Income Tax Act, 1961, the credit of the said amount has not been given to the petitioners while passing of the order of assessment of their Income Tax Returns. As a result of this, the Department has raised demands with statutory interest under Sections 234A, 234B, 234C and 234D of the Income Tax Act. 3. Learned Senior counsel points out that despite confirmation as to genuineness of the Form-6A certificate by the deductors, the Department of Income Tax is reluctant in proceeding with the same and for all these years the matter has remained pending for no fault on the part of the petitioners. 4. Learned counsel for the Punjab National Bank has pointed out from the letter dated 10.02.2016 (Annexure-P/4) that in the enquiry relating to verification of TDS claim in case of M/s Sharda Construction, New Area, Aurangabad, the Punjab National Bank (hereinafter referred to as 'P.N.B.') has confirmed that TDS amount of Rs. 2,08,540-/ has been deducted from interest on TDR and deposited at Dhamitola Branch, Gaya. The Challan number and the date of deposit of the amount to the Central Government account has been shown in Annexure-P/4 which is part of....
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....d to have been deposited with the Central Government. In this connection, she has relied on Section 199 of the IT Act read with Rule 37BA. It is submitted that according to this Rule, the credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII shall be given to the person to whom payment has been made or credit has been given on the basis of information relating to deduction of tax furnished by the deductor to the Income Tax Authority or the person authorised by such authority. It is submitted that under Sub-Rule (4) of Rule 37BA, credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis - (i) the information relating to deduction of tax furnished by the deductor to the Income Tax Authority or the person authorised by such authority; and (ii) the information in the return of income in respect of the claim for the credit, subject to verification in accordance with the risk management strategy formulated by the Board from time to time. 20. It is submitted that Section 200 of the IT Act imposes a duty upon the person deducting any sum under the Ac....
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....has in her written submissions made a statement that the deductors have neither filed their returns nor deposited the deducted amount into Central Government account, in course of her submissions at the Bar, she does not deny the facts stated in the writ applications. Such submissions in the written form by learned Senior Standing Counsel is only for the sake of submissions, therefore, do not carry any weight and are liable to be rejected. 25. In the given facts of these writ applications, we have considered the statutory provisions which have a bearing upon this case. Section 198 under the Heading "Tax Deducted is Income Received" reads as under:- "198. Tax deducted is income received. - All sums deducted in accordance with [the foregoing provisions of this Chapter] [and income-tax paid outside India, by way of deduction, in respect of which an assessee is allowed a credit against the tax payable under this Act], shall, for the purpose of computing the income of an assessee, be deemed to be income received: [Provided that the sum being the tax paid, under sub-section (1A) of section 192 for the purpose of computing the income of an assessee, shall not be deeme....
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....e deemed to be an assessee in default in respect of such tax: [Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a [payee] or on the sum credited to the account of a [payee] shall not be deemed to be an assessee in default in respect of such tax if such [payee]- (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:] [Provided further that] no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.] [(1-A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole ....
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....s section, the expression "accountant" shall have the meaning assigned to it in the Explanation to sub-section (2) of section 288.]" 28. Section 203 of the IT Act is under heading "Certificate for Tax Deducted". Under Sub-Section (1) of Section 203 every person deducting tax has a duty to credit or payment of the same within the prescribed period and furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, specifying the amount so deducted, the rate at which tax has been deducted and such other particulars as may be prescribed. 29. Section 203A is under heading "Tax Deduction and Collection Account Number". Section 203A is reproduced hereunder for a ready reference:- "[203A. Tax deduction and collection account number.-(1) Every person, deducting tax or collecting tax in accordance with the provisions of this Chapter, who has not been allotted a tax deduction account number or, as the case may be, a tax collection account number, shall, within such time as may be prescribed, apply to the Assessing Officer for the allotment of a "tax deduction....