2024 (5) TMI 1505 - HC - Income Tax

Default in deposit of TDS - On salary for the concerned years tax has been duly deducted but the same has not been deposited by the employer - HELD THAT - Since the deduction of TDS from the salaries of the petitioners is not disputed we find no justification for the demands being shown as outstanding against the writ petitioners. We accordingly dispose of these three writ petitions. We additionally call upon the respondents to ensure that all demands with respect to TDS as currently reflected against the petitioners on the Income Tax Business Application portal are consequently deleted.

Summary

Issues:
1. Tax Deducted at Source (TDS) not deposited by the employer leading to demands against the petitioners.
2. Application of the Central Board of Direct Taxes (CBDT) Office Memorandum (OM) dated 11 March 2016.
3. Justification for outstanding demands despite TDS deduction from salaries.
4. Disposal of writ petitions in line with Assessing Officer's orders.
5. Deletion of demands reflected on the Income Tax Business Application portal.

Analysis:
1. The writ petitioners approached the Delhi High Court due to demands imposed on them despite tax deductions from their salaries not being deposited by the employer. The inaction of the employer was cited as the reason for the default in TDS deposit.

2. The respondents, in accordance with the CBDT's OM of 11 March 2016, passed orders in two specific cases (WP(C) 3545/2023 and 3547/2023) granting a stay of demand. The orders highlighted that the tax was deducted but not deposited by the employer, leading to the demands. The stay was granted, and coercive action against the demands for the relevant assessment years was restrained.

3. The High Court noted that since TDS deduction from the petitioners' salaries was not in dispute and considering the CBDT's OM addressing this issue, there was no justification for the demands to remain outstanding against the petitioners. The court disposed of the writ petitions in line with the orders passed by the Assessing Officer in the mentioned cases.

4. The court concluded by directing the respondents to ensure the deletion of all demands related to TDS currently reflected against the petitioners on the Income Tax Business Application portal, emphasizing the resolution of the outstanding demands in light of the TDS deductions made but not deposited by the employer.

This judgment underscores the importance of timely TDS deposit by employers and the legal recourse available to employees facing demands due to the employer's non-compliance. The application of CBDT guidelines and the court's intervention in granting relief to the petitioners based on the TDS deductions made but not deposited by the employer form the crux of the decision.