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TMI Blog2021 (11) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - R/SPECIAL CIVIL APPLICATION NO. 6193 of 2021 - - - Dated:- 15-11-2021 - HONOURABLE MS. JUSTICE SONIA GOKANI And HONOURABLE MS. JUSTICE NISHA M. THAKORE DARSHAN R PATEL(8486) FOR THE PETITIONER(S) NO. 1 MR.VARUN K.PATEL(3802) FOR THE RESPONDENT(S) NO. 1 ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. Here is the petitioner who is a pilot by profession and was an employee of M/s. Kingfisher Airlines. The Kingfisher Airlines deducted the Tax Deducted at Source ( TDS hereinafter) to the tune of ₹ 7,20,100/- for the Assessment Year 2009-10 and ₹ 8,70,757/- for the Assessment Year 2011-12 in case of the petitioner. The amount since had not been deposited by the Airlines in the Central Government Account, the credit when claimed by the petitioner, the same was obviously not given by the respondent and the demand had been raised with interest. 2. This since had aggrieved the petitioner, he approached this Court challenging the recovery notices dated 19.11.2013 and 21.08.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, paying no head to such a request, the respondent issued the recovery notice on 21.08.2014 for both the assessment years 2009-10 and 2011-12. 3.5. Once again, the demand notice had been issued on 22.12.2015 for the assessment year 2011-12. The petitioner made request on 13.01.2016 to the respondent to drop the recovery proceedings and cancel the demands. This was reiterated on 23.12.2019. 3.6. As all such requests fell on deaf ears, he has chosen to approach this Court with the aforementioned prayers. 4. The affidavit-in-reply is filed by the respondent Joint Commissioner of Income Tax (OSD), Circle 1(1)(1), Vadodara, who inter alia stated that the petitioner failed to disclose the violation of any of his statutory or constitutional right and hence, the petition under Article 226 cannot be maintained. 4.1. According to respondent, it was a duty of the petitioner to join the necessary parties i.e. the Kingfisher Airlines as according to the petitioner, the employer has deducted the TDS and not deposited to the government. There is a gross delay and latches in preferring the petition since the TDS was deducted during the financial years 2008-09 and 2010-11 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder - 10. We are in complete agreement with the view taken by the Bombay High Court and Gauhati High Court. Applying the aforesaid two decisions of the Bombay High Court as well as Gauhati High Court, the facts of the case on hand and even considering Section 205 of the Act action of the respondent in not giving the credit of the tax deducted at source for which form no.16 A have been produced by the assessee deductee and consequently impugned demand notice issued under Section 221(1) of the Act cannot be sustained. Concerned respondent therefore, is required to be directed to give credit of tax deducted at source to the assessee deductee of the amount for which form no.16 A have been produced. 11. In view of the above and for the reasons stated petition succeeds. It is held that the petitioner assessee deductee is entitled to credit of the tax deducted at source with respect to amount of TDS for which Form No.16A issued by the employer deductor M/s. Amar Remedies Limited has been produced and consequently department is directed to give credit of tax deducted at source to the petitioner assessee deductee to the extent form no.16 A issued by the deductor have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted by the person responsible to deduct the amount under the statutory provisions, the assessee has no control over the matter. In case of default in making over the amount to the account of the Central Government, it is obviously the person responsible to deduct or the person who has made the deduction who is held responsible for the same. The responsibility of such person is to the extent that he has to be deemed to be an assessee in default in respect of the tax. He may be deemed to be an asses see in default not only in cases where after deduction he does not make over the amount to the Central Government but also in cases where there is failure on his part to deduct the amount at source. This responsibility has been fastened upon him under Section 201 of the Income-tax Act. It is, of course, without prejudice to any other consequences which he or it may incur. Presently we are not concerned with the case where the person responsible to make the deductions has not deducted the amount at all. It may or may not fall in a different category from one where the amount has been deducted and not made over to the Central Government. We are concerned with the latter category of cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to total discharge of the tax liability so long as the amount deducted is not deposited in the coffers of the Central Government. It is for this reason Section 199 of the Income-tax Act makes it clear that credit for tax deducted would be given when the amount is deducted and paid to the Central Government and a certificate of deduction is produced as furnished under Section 203 of the Income-tax Act. It is obvious that unless the amount is paid to the Central Government, the tax liability is not discharged, nor can it be said that the assessee has made the payment of the tax amount payable to the Government. We find no force in the submission made on behalf of the petitioner-respondent that on mere deduction of the amount at source, credit for tax deducted must be given and it cannot be withheld even though the person responsible to deduct the tax at source has not made it over to the Central Government. In our view, if that contention is accepted that credit for tax deducted has to be given on mere deduction of the amount at source, in that event, perhaps, there would be no legal justification to treat the person responsible to deduct the amount at source as an assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s noticeable in this provision is that its applicability is not dependent upon the credit for tax deducted being given under Section 199 of the Income-tax Act. What is necessary for applicability of this provision is that the amount has been deducted from the income. In case where the amount has been deducted but not paid to the Central Government that eventuality is taken care of by Section 201 of the Income-tax Act. Learned counsel for the appellant could not show that under the law it may be permissible to proceed against the assessee even after deduction of the tax at source, nor learned counsel for the petitioner-respondent could persuade us to hold that merely by deduction of tax at source, credit for deduction of tax at source has to be given even though the amount may not have been made over to the Government treasury. The reason for this has already been explained by us in the discussion held in the earlier part of this judgment as the mere deduction of tax at source would not close the chapter of tax liability unless it is deposited in the Government treasury. 9. The facts being almost identical, no separate reasoning are desirable and the petition is being ALLOWED. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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