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2022 (10) TMI 715 - AT - Income TaxCredit for TDS deducted by the employer but not deposited to Government Account - HELD THAT - Credit against which is allowed to the assessee and not granting TDS credit for the reasons that no such tax was deposited by the employer of the assessee in the government account. Before us, assessee while making submission, strongly relied on various decisions of Tribunal and the decision of Hon ble Jurisdictional High Court in Kartik Vijaysinh Sonavane 2021 (11) TMI 682 - GUJARAT HIGH COURT Considering various decisions of this combination and decision of Hon ble Jurisdictional High Court in Kartik Vijaysinh Sonavane Vs DCIT (supra), the grounds of appeal raised in the present appeal is restored back to the file of Assessing Officer to verify the fact and grant set off tax shown in Form 26AS as well as tax deducted and reflected in the wages/salary slip of assessee irrespective of the fact that such TDS is reflected in Form 26AS and to pass order afresh in accordance with law. With this direction, the appeal of assessee is allowed for statistical purposes.
Issues:
Appeal against CIT(A)/NFAC order for AY 2016-17 - Credit for TDS not deposited by employer - Interpretation of Section 205 - Jurisdictional High Court decision applicability - Restoration of matter to AO for verification and granting set off. Analysis: The appeal before the ITAT Surat involved the issue of denial of credit for TDS deducted by the employer but not deposited to the Government account, amounting to Rs. 2,12,304. The assessee contended that as per Section 205 of the Income Tax Act, where TDS has been made by the employer, the assessee is not liable to pay the tax again. The assessee relied on the decision of the Hon'ble Jurisdictional High Court in a similar case. The AR highlighted that the demand was created by CPC, Bangalore, and the assessee's tax was deducted by the employer, thus the assessee should not be asked to pay the tax again. The Revenue, represented by the Senior Departmental Representative, supported the CIT(A)'s order. The Revenue argued that since no tax was deposited as claimed by the assessee, no credit should be allowed. In an alternative submission, the Revenue stated that even if the matter required reconsideration as per the High Court decision, the assessee should not be allowed to claim a refund of the alleged tax deducted but not deposited. After considering the submissions of both parties and reviewing the orders of the lower authorities, the ITAT Surat found that the demand was created due to TDS not deposited by the employer. The NFAC had dismissed the appeal based on the amount in Form 26AS. However, considering the decisions of the Tribunal and the High Court precedent, the ITAT Surat restored the matter back to the Assessing Officer. The ITAT directed the AO to verify and grant a set-off for tax shown in Form 26AS and tax deducted but reflected in the salary slip of the assessee. The ITAT emphasized that the TDS credit should be granted irrespective of whether it is reflected in Form 26AS. The appeal was allowed for statistical purposes. In conclusion, the ITAT Surat's judgment focused on the interpretation of Section 205 regarding the credit for TDS not deposited by the employer. The decision highlighted the importance of verifying TDS deductions made by the employer and granting appropriate set-offs to the assessee. The judgment underscored the significance of following High Court decisions and restoring matters for proper assessment in accordance with the law.
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