Case Law Details
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.
2. The assessee is aggrieved and is in appeal before us raising the solitary ground of appeal that assessee has received salary income from M/s. Think & Learn Pvt. Ltd. [ Byjus] amounting to Rs.1,99,28,404 however the TDS credit amounting to ₹ 6,791,511 due to the assessee was denied by the Central Processing Centre [CPC]. The CPC was of the view that the amount of tax credit allowable to the assessee has not been deposited by the employer with the Government of India and hence the credit cannot be granted. The assessee filed his return of income for assessment year 2024 – 25 on 25 December 2024 at a total income of ₹ 19,969,720 wherein the assessee has shown income under the head salaries, capital gains and other sources claimed credit for tax deduction at source of ₹ 6,891,511 primarily deducted from salary income by his employer M/s. Think & Learn Pvt. Ltd. The return was processed under section 143 (1) on 3 January 2025 resulting into demand of ₹ 8,058,860 due to non-granting of tax credit on salary income as the employer of the assessee has allegedly failed to deposit the tax deducted at source from the salary income and did not file the tax deduction at source returns. The employer of the assessee M/s. Think & Learn Pvt. Ltd. is Byjus.
3. The assessee preferred an appeal before the learned CIT – A and stated that even if the assessee employer has not deposited tax with the Government of India, there is no fault of the assessee and the credit should be granted to the assessee of the above sum. The assessee further relied upon the decision of the Hon’ble Gujarat High Court as well as several other High Courts including the Hon’ble Bombay High Court and Hon’ble Delhi High Court that in all these cases the credit has been given to these assessees despite the assessee’s employer did not deposit the tax at source and did not file the tax deduction at source return. The learned CIT – A held that the credit for tax deduction at source cannot be allowed at this appellate stage. It can be allowed only if such TDS is appearing in form No. 26AS of the assessee which is not the case here. Accordingly the appeal of the assessee was dismissed.
4. The ld. AR submitted that the assessee has offered the income of salary, the tax deducted by the assessee employer from the salary has been claimed by the assessee as tax credit which is denied by the CPC for the simple reason that Byjus has not deposited this amount to the credit of the Government. Therefore instead of penalising Byjus, the assessee is penalised.
5. The ld. DR vehemently supported the order of the learned that CIT – A stating that when the amount is not paid of the tax deducted at source and further it is not known whether there is really taxes deducted at source or not, such credit cannot be given.
6. We have carefully considered the rival contention and perused the orders of the learned that lower authorities. The assessee is employee of M/s. Think & Learn Pvt. Ltd. which is called as Byjus. The salary is paid to the assessee after deducting tax at source on salary payment under the provisions of section 192 of the Act. The assessee claims such tax deduction at source while filing the return of income as advance tax on tax credit available. Such tax credit was denied to the assessee as apparently the CPC did not find any corresponding entry in form No. 26AS of the assessee. As there is no allegedly payment to the Central government of depositing the tax so deducted from the salary income, the assessee was denied the benefit of tax credit.
7. We have found that assessee has relied upon several judicial precedents of the Hon’ble High Court wherein despite the employer has not deposited tax deducted at source from the salary income to the credit of Government, the credit of the same could not be denied to the assessee. Therefore respectfully following all those decisions we direct the ld. AO to grant credit of tax deduction at source.
8. Further as per the information shown to us by the ld. AR in paper book wherein it is stated that the break-up of the summary of salary received during the assessment year shows that the same matches with the pay slip from M/s. Think & Learn Pvt. Ltd. as well as the computation statement shared by employer of the company. There is an affidavit also filed by the assessee to the interim resolution professional wherein the employer of the assessee company has gone into liquidation/reconstruction. Therefore, undoubtedly, the taxes have been deducted by the employer of the assessee of the above sum which assessee deserves to be given credit of.
9. In view of the above facts we allow the appeal of the assessee directing the learned assessing officer to grant credit for tax deduction at source to the assessee after verifying that in the payslips produced before us, the tax has been deducted by the employer.
10. In the result appeal of the assessee is allowed with above directions.
Order pronounced in the open court on 10th June, 2026.
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