Milan Arvindbhai Patel Vs ACIT (Gujarat High Court)
Gujarat High Court held that employee shall not be called upon to pay the tax himself to the extent to which tax has been deducted by the employer. In nut-shell, department cannot deny the benefit of TDS deducted by employer to the employee even if the TDS is not deposited by employer.
Facts- The petitioner is an individual, seeking to challenge the action under Article 226 of the Constitution of India of cancelling the outstanding demand as reflected on income tax portal for the Assessment Year 2010-11, 2011-12 and 2012-13 and to quash the recovery notices dated 14.02.2020, dated 15.02.2020 and dated 14.02.2020 for the respectively assessment years, for recovering the unpaid TDS amount of the employer of the petitioner i.e. Kingfisher Airlines as well as seeking the refund of an amount which is adjusted against the outstanding demand.
Conclusion- In the instant case. Reference of Section 205 of the I.T. Act is to the effect where it provides that the tax when is deductible at source, assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted form that income. Its applicability is not dependent upon the credit for tax deducted being given under Section 199 of the I.T. Act.
Facts being identical, petition is allowed. The department shall not be denying the benefit of tax deducted at source by the employer during the relevant financial years to the petitioner. The credit of the tax shall be given to the petitioner and if in the interregnum, any recovery or adjustment is made by the department, the petitioner shall be entitled to the refund.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
The petitioner is an individual, seeking to challenge the action under Article 226 of the Constitution of India of cancelling the outstanding demand as reflected on income tax portal for the Assessment Year 2010-11, 2011-12 and 2012-13 and to quash the recovery notices dated 14.02.2020, dated 15.02.2020 and dated 14.02.2020 for the respectively assessment years, for recovering the unpaid TDS amount of the employer of the petitioner i.e. Kingfisher Airlines as well as seeking the refund of an amount which is adjusted against the outstanding demand.
2. As averred, the petitioner is a pilot working with Indigo Airlines since 2013. During the Assessment Years 2010-11 to 2012-13, he was working with Kingfisher Airlines.
3. The petitioner filed his return of income under Section 139 of the Income Tax Act (‘the Act’ for short) for AY 2010-11, 2011-12 and 2012-13.
4. The notice was received from the office of the Assessing Officers on 19.11.2013 and 21.08.2014 seeking recovery of outstanding demand of Rs.19,40,707/- for Assessment Year 2011-12 and further notice of 03.03.2015 recovery of 25,12,913/- for Assessment Year 2012-13. In fact, the petitioner, as averred, is eligible for the refund of Rs.45,570/- for the AY 2012-13.
5. The department has issued recovery notices. The petitioner approached his employer – Kingfisher Airlines, requesting to furnish the certificate in relation to the TDS amount deducted. Certificate was given along with the computation of salary on 19.11.2015 stating the Form-16 is under process and filing of annual TDS return will be completed shortly.
6. The summary of income tax return and refund due to the petitioner is given below.
