Tarun Sabharwal Through Attorney Holder Rajneesh Raheja Vs ITO (Delhi High Court)
The Delhi High Court heard a petition filed by an employee of Kingfisher Airlines Ltd., challenging a total tax demand of ₹28,72,252 for Assessment Years 2010-11, 2011-12, and 2012-13. The demand arose because the company had deducted Tax Deducted at Source (TDS) from the petitioner’s salary but allegedly failed to deposit it with the government. The petitioner contended that for AY 2010-11, the deductor had in fact deposited the TDS, and the entire demand should not have been raised against him. The petitioner sought a writ of certiorari or mandamus to set aside the tax demand, including interest, claiming that he should not be held liable for the non-deposit by the employer.
The Court noted that the Central Board of Direct Taxes (CBDT) issued a circular on 21.09.2023, indicating that under such circumstances, the demand cannot be recovered from the employee. The Court observed that the disputed demand had been adjusted against subsequent assessment years. In light of these facts, the Court directed the Assessing Officer (AO) to treat the petition as a representation and decide it within eight weeks, considering the CBDT circular and the Court’s previous ruling in Sanjay Sudan v. Assistant Commissioner of Income Tax, NC: 2023/DHC/001342. The AO was also instructed to examine whether the adjustment against subsequent years was appropriate.
