Viswanathan Ramakrishnan Vs ITO (ITAT Bangalore)
Employee Cannot Be Punished for Employer’s TDS Default: Bangalore ITAT Grants BYJU’S Employee Credit for ₹67.9 Lakh TDS
In a significant relief to a former BYJU’S employee, the Bangalore ITAT held that TDS credit cannot be denied to an employee merely because the employer deducted tax from salary but failed to deposit it with the Government or file the corresponding TDS returns.
The assessee had disclosed salary income of about ₹1.99 crore received from Think & Learn Pvt. Ltd. (BYJU’S) and claimed TDS credit of about ₹67.92 lakh. While processing the return under section 143(1), CPC denied the credit on the ground that the employer had not deposited the TDS with the Government and the corresponding credit was not reflected in Form 26AS, resulting in a demand of over ₹80 lakh. The CIT(A) also upheld the denial.
Before the Tribunal, the assessee relied on several High Court decisions holding that an employee cannot be deprived of TDS credit when tax has already been deducted from salary by the employer. The assessee also produced salary slips, salary computations and supporting documents showing that the tax had in fact been deducted by BYJU’S. It was further brought to the Tribunal’s notice that the employer had entered insolvency/liquidation proceedings.
The Tribunal observed that once tax is deducted from salary under section 192, the employee cannot be penalised for the employer’s failure to deposit the amount with the Government. Relying on the judicial precedents cited by the assessee, it held that the credit of TDS could not be denied merely because the amount was not reflected in Form 26AS due to the employer’s default.
Accordingly, the Tribunal directed the Assessing Officer to grant TDS credit to the assessee after verifying from the salary slips and related records that tax had actually been deducted by the employer. The appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 2215/Bang/2025 is filed by Mr. Viswanathan Ramakrishnan (the assessee/appellant) for assessment year 2024 – 25 against the appellate order passed by the Commissioner of income tax (Appeals) – 1, Pune dated 14thAugust 2025 wherein the appeal filed by the assessee against the assessment order dated 3 January 2025 passed under section 143 (1) of the Income Tax Act, 1961 [the Act] wherein the assessee claiming the deduction of tax at source was denied by the learned CIT – A.
