9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (11) TMI 89 - HC - Income TaxApplicability of provisions of section 205 - non-deposit of Tax Deducted at Source (TDS) by the employer - refund of the petitioner was adjusted against the outstanding demand - HELD THAT - This Court in case of Kartik Vijaysinh Sonavane 2021 (11) TMI 682 - GUJARAT HIGH COURT as held case is no longer res integra and is covered by the decision of this very Court rendered in case of Devarsh Pravinbhai Patel. 2018 (9) TMI 1635 - GUJARAT HIGH COURT where too, the petitioner was an employee of the Kingfisher Airlines and worked as a pilot. In his case also the TDS on the salary made to the petitioner had not been deposited. It is only when the department raised the tax demand with interest and initiated the actions of the recovery that this Court was approached - Relying on the decision of the Bombay High Court rendered in case of Assistant Commissioner of Income Tax and Others vs. Om Prakash Gattani 2000 (1) TMI 43 - GAUHATI HIGH COURT this Court allowed the same stating Department cannot deny the benefit of tax deducted at source by the employer of the petitioner during the relevant financial years. Credit of such tax would be given to the petitioner for the respective years. If there has been any recovery or adjustment out of the refunds of the later years, the same shall be returned to the petitioner with statutory interest. - Decided in favour of assessee.
Issues Involved:
1. Legitimacy of the demand raised by the Income Tax Department for Assessment Years (AY) 2009-10 and 2011-12. 2. Adjustment of refunds against the alleged outstanding demands. 3. Applicability of Section 205 of the Income Tax Act regarding non-deposit of Tax Deducted at Source (TDS) by the employer. Detailed Analysis: 1. Legitimacy of the Demand Raised: The petitioner challenged the demand raised by the respondent for AY 2009-10 and 2011-12, asserting that the employer deducted TDS from the salary but failed to deposit it with the Income Tax Authorities. The petitioner filed returns for AY 2009-10 declaring an income of Rs. 49,26,000 and claimed TDS credit of Rs. 8,34,099. However, the Assessing Officer processed the return without giving credit for the TDS, resulting in a demand of Rs. 11,42,390. The petitioner contended that the demand was unjust as it was based on the employer's failure to deposit the deducted TDS. 2. Adjustment of Refunds Against Alleged Outstanding Demands: The petitioner filed returns for subsequent years, and any refunds due were adjusted against the demand for AY 2009-10 and AY 2011-12. The petitioner filed rectification applications under Section 154 of the Income Tax Act, which were initially rejected but later directed to be rectified by the CIT (Appeals). Despite this, no order was passed to give effect to the CIT(A)'s directive, and the petitioner received an intimation under Section 245 proposing to adjust the refund of AY 2023-24 against the outstanding demands. The petitioner argued that since there were no outstanding dues, the adjustment of refunds was unwarranted. 3. Applicability of Section 205 of the Income Tax Act: The petitioner relied on Section 205 of the Income Tax Act, which states that where tax is deductible at source, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted. The petitioner argued that the department's action of not giving TDS credit due to the employer's failure to deposit the tax was contrary to this provision. The court referred to previous judgments, including Kartik Vijaysinh Sonavane vs. Deputy Commissioner of Income Tax, which held that the department cannot deny the benefit of TDS credit due to the employer's non-deposit. The court emphasized that the responsibility to deposit TDS lies with the employer, and the assessee should not be penalized for the employer's default. In conclusion, the court quashed the impugned intimation under Section 143(1) for both assessment years and directed the respondents to pass consequential orders by reversing the refund adjustments and giving credit for the tax deducted by the employer. The court reiterated that the department should recover the unpaid TDS from the employer, not the employee, as per Section 205 of the Income Tax Act. The petition was allowed, and the rule was made absolute with no order as to costs.
|
