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TMI Blog2024 (9) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee shall not be called upon to pay taxes himself to the extent to which tax has been deducted from the asessee s income. The object and purpose behind the provision is to the effect that when an obligation to deposit the tax as in the present case, is on the employer and if the employer has defaulted, the liability to pay such tax cannot be shifted so as to be foisted on the employee, who is in fact the beneficiary of the payment to be received from the employer and who would also become the beneficiary of the tax being deposited at source on his behalf. Such is the object of the provision. However, what the department has done is that without a warrant in law, the liability to pay such tax is being foisted on the petitioners, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issuance of the Impugned Demand dated 12 January 2021 (Exhibit C to the Petition) after examining the legality, validity and propriety thereof, the Impugned Demands be quashed and set aside; 2. The case of the petitioners is that they were employees of respondent No. 2 for the period which is set out in each of the petition. They were being paid monthly emoluments / salary, after deduction of TDS (taxes at source) by respondent No. 2, as clearly seen from the pay slips issued to the petitioners by respondent No. 2, for the respective period (A.Y.) as set out in each of these notices. It is the case of the petitioners that since the year 2019, respondent No. 2 was involved in criminal proceedings initiated against it by the Enforcement Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slips as issued to the petitioners. The petitioners contend that it was not permissible for respondent No. 1 to issue such demand notices against the petitioners in view of clear provisions of Section 205 of the Income Tax Act, which bars any demand against the assessees. The provision ordains that where tax is deductible at source under the provisions of Chapter XVII, the assessee shall not be called upon to pay tax himself to the extent to which the tax has been deducted from the income. In this view of the matter, learned Counsel for the petitioners submits that no demand could have been foisted by respondent No. 1 on the petitioners. To this effect, the petitioners have also made representations on the portal of the department that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above, the Board hereby reiterates the instructions contained in its letter dated 01.06.2015 and directs the assessing officers not to enforce demands created on account of mismatch of credit due to non-payment of TDS amount to the credit of the Government by the deductor. These instructions may be brought to the notice of all assessing officers in your Region for compliance. This issues with the approval of Member (Revenue TPS). (Sandeep Singh) Under Secretary (Budget) Ph: 2309 4182 Email: [email protected] All Principal Chief Commissioners/ Principal Directors General of Income Tax. All Chief Commissioners/ Directors General of Income Tax. 5. Learned Counsel for the petitioners submits that in the past, some of the emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (b), let credit be granted to the petitioners in respect of the amount of tax deducted at source from the petitioner s salary for the Assessment Year in question as well as interest / penalty levied thereon. 7. Having heard learned Counsel for the parties and having perused the record as also the provisions of Section 205 of the Income Tax Act, we find that the mandate of Section 205 is absolutely clear that the assessee shall not be called upon to pay taxes himself to the extent to which tax has been deducted from the asessee s income. The object and purpose behind the provision is to the effect that when an obligation to deposit the tax as in the present case, is on the employer and if the employer has defaulted, the liability to pay s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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