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TMI Blog2024 (7) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax has been deducted from the income of the assessee, no further tax shall be called upon from the assessee. The natural corollary to same being that assessee has a right to get the credit of that TDS amount qua the demand against him. Reliance is placed on the following judicial pronouncements wherein it has been held that once tax has been deducted, it s the responsibility of the deductor to deposit the same with the government, deductee cannot be penalized and demand can not be raised on short fall of TDS on deductee. See SANJAY SUDAN [ 2023 (2) TMI 1079 - DELHI HIGH COURT] INCREDIBLE UNIQUE BUILDCON PRIVATE LIMITED [ 2023 (10) TMI 625 - DELHI HIGH COURT] INCREDIBLE UNIQUE BUILDCON PRIVATE LIMITED [ 2023 (6) TMI 1135 - DELHI HIGH COURT] , JASJIT SINGH [ 2023 (12) TMI 34 - DELHI HIGH COURT] . Thus we are of considered view that CIT(A) has fallen in error to misinterpret the judgement relied upon by the assessee by holding that there is merely bar on recovery of demand but does not lay down law for giving credit of TDS in respect of the amount which is not reflected in the 26AS form. The bar on recovery of such disputed TDS is specific and the credit of same to be given to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,05,04,694/- was accordingly paid by the assessee as against the liability to pay tax of Rs. 87,70,730/-. Therefore, the assessee claimed a refund of Rs. 17,33,960/- being excess tax paid by the assessee. Thereafter, the case of assessee was selected for scrutiny and nothing adverse was found. Accordingly, the income of the assessee was assessed at returned income. However, the refund was denied and a demand notice u/s 156 for Rs. 65,73,207/- was issued to the assessee owing to shortfall in the amount of TDS credit being granted to the assessee. 3.1 Aggrieved by the order passed by AO, assessee filed an appeal before CIT(A). During the course of appellate proceedings, it was submitted by the assessee that: i. That the corresponding income on which tax has been deducted by the deductor has been duly accounted for in the books of the assessee. ii. Complete details of tax deducted by the deductor has been furnished by the assessee which also forms part of the ITR Form 6 filed by the assessee placed at PB Pg.5-40. Relevant party wise details of tax deducted at source is at PB Pg.37-38. iii. It was also submitted by the assessee that its customers-M/s Ultra Home Construction Pvt. Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of TDS totalling to Rs. 1,32,90,467/- not appearing in Form 26AS provided by appellant himself, credit of same could not be granted by Assessing Officer. 19. The appellant has drawn attention towards the provisions of section 205 of me Act and has stated that in the light of provisions of section 205, the Assessing Officer cannot make any recovery from him. The appellant has also drawn attention to the decision of Hon'ble Delhi High Court in the case of Incredible Unique Buildcon Pvt. Ltd. (2023) 153 Taxmann.com 179 (Delhi), On perusal of these, it is seen that there is bar on recovery of demand. However, the present appeal is in respect of not giving credit of TDS in respect of the amount which is not reflected in the 26AS form. As such no infirmity is seen in the order of the Assessing Officer in not granting credit of TDS when there is no evidence to show that the TDS was deposited by the deductor. 20. From the appeal of the appellant, it is evident that the appellant is in appeal against the recovery proceedings. However, against the recovery proceedings, the appeal before the CIT(A) do not lie. In the list of appealable order u/s 246 and in the list of appealable orders be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20(2) of the Act. Therefore, there is a specified order i.e. order under Section 143(3) of the Act by which assessee is aggrieved and therefore, assessee is entitled to file an appeal in the present case before the learned CIT (A) u/s 246A(1)(a) of the Act . It is not the case of the Revenue that assessment order is not specified order under Section 246A (1) of the Act and assessee is not aggrieved with that. Therefore, we are not in agreement with the order of the learned CIT (A) that the appeals of the assessee are not maintainable. The learned CIT (A) therefore, should have decided the issue on its merit. Therefore, we categorically hold that the appeals filed before the learned CIT (A) for all these assessment years were wrongly dismissed holding it to be not maintainable. According to us, same is maintainable and those are liable to be decided on the merits of the case. 5.1 Ld. DR has not contested this aspect of maintainability of appeal before the CIT(A). Accordingly to that extent we follow the Mumbai Bench order and we hold that appeal was maintainable before the CIT(A). 6. Then coming to the question if Assessee can be held liable for the deficit tax at source which was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put in place by the legislature via Section 205 of the Act. 10. Therefore, in our view, the petitioner is right inasmuch as neither can the demand qua the tax withheld by the deductor/employer be recovered from him, nor can the same amount be adjusted against the future refund, if any, payable to him. 11. Thus, for the foregoing reasons, we are inclined to quash the notice dated 28.02.2018, and also hold that the respondents/revenue are not entitled in law to adjust the demand raised for AY 2012-13 against any other AY. It is ordered accordingly. 12. Notably, in paragraph 7 of the writ petition, the petitioner has adverted to the fact that he is entitled to refund of Rs. 1,94,410/- in respect of AY 2015-16. INCREDIBLE UNIQUE BUILDCON PRIVATE LIMITED VERSUS OFFICE OF THE INCOME TAX OFFICER WARD (12) (1) NEW DELHI, 2023 (10) TMI 625 - DELHI HIGH COURT, Dated: - 3-10-2023, where in again Hon ble Delhi High Court has held as follows; 7. There is no dispute that in the present case, it was mandatory duty of Clutch Auto Ltd to deduct tax at source qua the payments made to the nonapplicant/assessee. Also not in dispute is the legal proposition that vide Section 205 of the Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IMITED VERSUS OFFICE OF THE INCOME TAX OFFICER WARD (12) (1) NEW DELHI, 2023 (6) TMI 1135 - DELHI HIGH COURT, Dated: - 31-5-2023 13. Clearly, what follows is that while respondent/revenue cannot recover the deficit tax at source from the petitioner, which was deducted and pocketed by CAL, and they cannot also refuse to grant credit for the same. The rationale being what the appellant/revenue cannot do directly, it is impermissible for it to reach the same end indirectly. SHRI CHINTAN BINDRA VERSUS DEPUTY COMMISSIONER OF INCOME TAX ORS., 2023 (12) TMI 63 - DELHI HIGH COURT, Dated: - 29-11-2023 4. That being so, the core issue to be considered by us is as to whether any recovery towards the said outstanding tax demand can be effected against the petitioner in view of the admitted position that the tax payable on salary of the petitioner was being regularly deducted at source by his employer namely Kingfisher Airlines Ltd. who did not deposit the deducted tax with the revenue. 5. The said issue stands covered by the judgment of this court in the case of Sanjay Sudan vs Assistant Commissioner of Income Tax, [2023] 148 taxmann.com 329 (Delhi) . 10. In view of the aforesaid, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and filed his return of income for the impugned A.Y on 31.10.2019 declaring total income at Rs. 1,57,94,132/- and paid tax of Rs. 53,85,276/- consisting of advance tax of Rs. 30,00,000/- and tax deducted at source of Rs. 25,05,786/- and claimed a refund of Rs. 1,20,510/-. The CPC Bengaluru in the intimation u/s 143(1) did not give credit of Rs. 10,11,000/- being the TDS u/s 194IA of the Act by Mr. Pradeep Ramrakhyani. 10. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A)-NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the assessee in the instant case sold his immovable property for a consideration of Rs. 10,11,00,000/- to one Mr. Pradeep Ramrakhyani who deducted TDS of Rs. 10,11,000/- under the provisions of section 194IA but the same was not deposited by the vendee into the credit of the Central Govt. A/c and he had not uploaded Form No.26QB. We find the CPC therefore, did not give TDS credit of Rs. 10,11,000/- in the intimation passed u/s 143(1) and the CIT (A)-NFAC upheld the action of the CPC, the reasons of which have alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue, measures can always be initiated against such payers. 6.3. Thus we are of considered view that CIT(A) has fallen in error to misinterpret the judgement relied upon by the assessee by holding that there is merely bar on recovery of demand but does not lay down law for giving credit of TDS in respect of the amount which is not reflected in the 26AS form. The bar on recovery of such disputed TDS is specific and the credit of same to be given to assessee is natural consequence. Further, we are of firm view that inability of an assessee to procure form 16A, due to intentional mischief of the deductor cannot be basis to refuse grant of credit of TDS or the refund arising consequent to giving credit, if assessee is otherwise eligible for same. This issue in all the appeals is decided infavour of assessee. 7. In regard to second issue we find that issue requires examination of certain facts and consequential effects, which are of arithmetical nature. Accordingly, the second issue of AY 2017-18 is allowed for statistical purposes. The AO shall make necessary verification and pass an order accordingly. 8. The appeals accordingly stand allowed with consequences to follow as directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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