2023 (10) TMI 1354 - HC - Income Tax

Bar against direct demand on assessee u/s 205 - Withholding tax payable on salary - Adjustment of the withheld tax not been deposited by the deductor in the Central Government Account against the refund due and payable to the deductee/assessee - outstanding demand along with the accrued interest - HELD THAT - As tax having been deducted at source by the employer cannot be recovered from the petitioner in view of the embargo placed by Section 205 of the Income Tax Act 1961 in short Act . This issue is covered by the judgment of Sanjay Sudan 2023 (2) TMI 1079 - DELHI HIGH COURT thus demand for AYs 2012-13 and 2013-14 are quashed. Consequentially the show-cause notice shall collapse.

Summary

Issues involved:
The issues in this case involve outstanding tax demands for Assessment Years 2012-2013 and 2013-2014, a refund sought for Assessment Year 2019-2020, and the legality of a show-cause notice dated 04.02.2020.

Outstanding Tax Demands for AYs 2012-13 and 2013-14:
The petitioner sought a writ to quash the outstanding demand along with accrued interest for Assessment Years 2012-2013 and 2013-2014. The respondent/revenue accepted that tax deducted at source by the employer cannot be recovered from the petitioner due to the embargo placed by Section 205 of the Income Tax Act, 1961. The court referred to a previous judgment in Sanjay Sudan v. Assistant Commissioner of Income-tax and quashed the demands for the mentioned assessment years, leading to the collapse of the show-cause notice dated 04.02.2020.

Refund for AY 2019-20:
The petitioner had also sought a writ directing the respondent to set aside an intimation dated 23.09.2019 and return the refund amount sought for Assessment Year 2019-2020 along with statutory interest. However, the petitioner's counsel informed the court that the refund for AY 2019-20 had already been received, and therefore, this prayer was not pressed further.

Conclusion:
The High Court, after considering the arguments and legal provisions, disposed of the writ petition by quashing the outstanding tax demands for Assessment Years 2012-2013 and 2013-2014. The court also directed that parties should act based on the digitally signed copy of the order.