TaxTMI 
TaxTMI 
2026 (9) TMI 1497
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....ed by the petitioner under Order VII Rule 11 read with Section 151 of the Code of Civil Procedure, 1908 (Hereinafter 'CPC'). 3. At the outset, it is appropriate to refer to the factual background of the case. 4. The present petitioner and the respondent had friendly relations. On account of these friendly relations, in 2008, the respondent advanced a loan to the petitioner, against which no documents were executed. 5. The record indicates that the petitioner deducted TDS on the interest payable on the loan amount and issued signed balance confirmations acknowledging the sum due to the respondent, after the closing of accounts at the end of each year. These balance confirmations were executed up to March 2014, whereas TDS deductions were carried out by the petitioner to the credit of the respondent until 31.03.2015, the TDS was also deposited with the Income Tax Department as is demonstrated by Form 26 AS and Form 16-A for the financial years 2014-15. 6. Subsequently, the petitioner ceased making payments toward the loan. Owing to such non-payment, the respondent served a legal notice dated 29.05.2017 upon the petitioner. Thereafter, the respondent instituted the underly....
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....reliance is placed on Ramisetty Venkatanna v. Nasyam Jamal Saheb (2023) SCC OnLine SC 521 where the Hon'ble Supreme Court held, that a plaint which creates an illusory cause of action through clever drafting, ought to be rejected at the threshold under Order VII Rule 11 of the CPC. Applying this principle to the present case, the learned counsel submits that the respondent cannot be permitted to circumvent the statutory bar on limitation through clever drafting. 14. Reliance is placed upon the decision of the Division Bench of the Bombay High Court in S.P. Brothers v. Biren Ramesh Kadakia (2008 SCC OnLine Bom 1599) to submit that a TDS certificate is merely issued in discharge of statutory obligations under the Income Tax framework, and it neither amounts to acknowledgment of any subsisting liability, nor does it extend the period of limitation to institute a suit. It was held in the aforesaid case, that a TDS certificate is executed solely for the statutory purpose of acknowledging tax deduction at source and does not specify the terms of repayment, or the underlying contractual transaction itself. 15. Further reliance is placed on another decision of the Bombay High Court i....
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....ount of respondent with the Income Tax Department, and that these actions constitute an admission of liability and as per Section 19 of the Limitation Act, 1963, extended the period of limitation to file the suit. In this regard, the respondent has placed reliance on the judgment passed by this Court in Ansal Housing Ltd. v. Samyak Projects Pvt. Ltd. (2023 SCC OnLine Del 2387), wherein it was held that the deposit of TDS extends the period of limitation in terms of Section 19 of the Limitation Act, 1963.The said judgment was upheld by the Division Bench of this Court, in Samyak Projects (P) Ltd. v. Ansal Housing Ltd. (2024 SCC OnLine Del 3778). 21. The learned counsel contends that Form 26 AS establishes the last date of TDS deduction by the petitioner to the credit of the respondent with the Income Tax Department as 31.03.2015. Reckoned from this date, the underlying suit instituted in 2017, is well within the three-year period prescribed under Article 19 of the Limitation Act, 1963, as the aforesaid continuous deduction of TDS extended the limitation period under Section 19 of the Limitation Act, 1963. 22. Lastly, it is contended that execution of the signed balance confirm....
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....1961 and Section 19 of the Limitation Act, 1963 held that the deposit of TDS, when made against the transaction in question, would constitute payment on account of the debt and extend the period of limitation. 28. More importantly, the aforesaid view was considered and affirmed by the Division Bench of this Court in Samyak Projects (P) Ltd. (supra). The Division Bench declined to accept the contention that the deposit of TDS could be ignored for the purposes of limitation and upheld the finding that TDS deposit resulted in a fresh period of limitation under Section 19 of the Limitation Act, 1963. 29. Additionally, the reliance placed by learned counsel for the petitioner upon S.P. Brothers (supra), and ACTAL (supra), does not advance the case of the petitioner. These decisions were rendered in the context of the evidentiary effect attributed to TDS certificates and cannot be read in isolation so as to displace the subsequent and binding pronouncement of the Division Bench of this Court in Samyak Projects (P) Ltd. (supra). The order in Kirtikumar Shantilal Chandan (supra), relied upon by the petitioner, is likewise distinguishable and does not detract from the views subsequent....