2024 (10) TMI 762 - HC - Income Tax

Intimation u/s 245 - Tax Deducted at Source (TDS) which was deducted from the petitioner s income by respondent no. 2, but was not deposited with the Income Tax Authorities - As TDS deducted by respondent no. 2 was duly reflected in Form 16A issued by respondent no. 2, petitioner thus claims that he is not liable to pay tax, which had been deducted by respondent no. 2 from his remuneration - Revenue pointed out adjustments made for different assessment years HELD THAT - Revenue as submits that the question of adjustment in respect of the AY 2009-10, AY 2010-11, and AY 2011-12 is covered in favour of the petitioner by the decision in Sanjay Sudan 2023 (2) TMI 1079 - DELHI HIGH COURT However, the adjustment in respect of the outstanding demand of Rs. 42,070/- pertaining to the AY 2017-18 is permissible as the said amount is recoverable. Petitioner submits that the petitioner is not challenging the adjustment of demand of Rs. 42,070/- as set out in the impugned notices in respect of the AY 2017-18. The petitioner s challenge is confined to the adjustment of demand in respect of the earlier AY. He states that the demand in respect of AY 2017-18 was accepted by the petitioner and has been paid. Concededly, the said issue is covered in favour of the petitioner by the earlier decision of Sanjay Sudan (supra). The impugned notices and order are set aside in respect of the adjustment of demands pertaining to the AY 2009-10; 2010-11; and AY 2011-12 as stated in the tabular statement set out in the intimation - Revenue shall pass the necessary consequential orders accordingly.

Summary

Issues:
Challenge to intimation and notice under Section 245 of the Income Tax Act, 1961 regarding outstanding demand for TDS not deposited by employer, adjustment of demands for various assessment years, applicability of Section 205 of the Income Tax Act, 1961, interpretation of Form 16A, legality of adjustments made by the Revenue, previous court decisions on similar matters.

Analysis:

The petitioner challenged an intimation and notice under Section 245 of the Income Tax Act, 1961, regarding an outstanding demand of Rs. 11,07,970/- for TDS not deposited by the employer for assessment years 2009-10 and 2011-12. The petitioner argued that the Revenue cannot recover TDS from him due to Section 205 of the Act and government instructions. The petitioner was a Co-Pilot whose employer had deducted TDS from his salary but failed to deposit it with the tax authorities. The TDS amount was reflected in Form 16A, and the petitioner contended that he should not be liable for this tax deduction.

The Revenue pointed out adjustments made for different assessment years in a tabular statement attached to the notice. The adjustments were for AY 2009-10, AY 2010-11, AY 2011-12, and AY 2017-18. The Revenue argued that adjustments for AY 2009-10, 2010-11, and 2011-12 were covered in favor of the petitioner by a previous court decision. However, the adjustment for AY 2017-18 was permissible as it was a recoverable amount. The petitioner did not challenge the adjustment for AY 2017-18, which had been paid.

The court noted that the issue of adjustments for AY 2009-10, 2010-11, and 2011-12 was already decided in favor of the petitioner in a previous court decision. Therefore, the impugned notices and order were set aside for these assessment years, and the Revenue was directed to process any refund due. The petitioner's challenge was limited to the earlier assessment years, and the court allowed the petition accordingly. The pending application was also disposed of in light of the judgment.