Ajay Kumar Goel Vs DCIT (ITAT Kolkata)
Employee Cannot Be Taxed for Employer’s TDS Default: ITAT Kolkata Directs Full Credit of Salary TDS
In this appeal, Assessee, an employee of Think & Learn Pvt. Ltd., challenged denial of TDS credit despite ₹1,48,81,489 being deducted from his salary. The employer had deducted TDS but failed to deposit it in the Government account. CPC therefore disallowed credit & raised demand.
Assessee argued that he cannot be penalised for the employer’s failure, relying on CBDT Instruction No. 275/29/2014-IT(B) dated 01.06.2015, which clearly states that where tax has been deducted from a taxpayer, demand should not be enforced merely because the deductor did not deposit the TDS. He also produced CBDT Office Memorandum dated 11.03.2016, reiterating the same protection & invoking section 205, which bars recovery of tax from a deductee if TDS has already been deducted from his income.
Assessee further relied on ITAT Mumbai decision in Aditya Ramniwas Dhoot (ITA 313/M/2025) & the Gauhati High Court ruling in Om Prakash Gattani (117 Taxman 549), both affirming that deductee cannot be saddled with liability where employer defaults.
Revenue supported the lower authority’s view. The JCIT(A) had taken an untenable stand that judicial precedents are not binding if from outside the jurisdiction.
