Mridul Raj Kunnon Vs CIT (Kerala High Court)
The Kerala High Court in Mridul Raj Kunnon & Others v. CIT (2025) addressed the issue of whether employees can claim credit for tax deducted at source (TDS) from their salaries when their employer has failed to remit the deducted amount to the Income Tax Department. The petitioners, employees of Attinad Software Pvt. Ltd., challenged the tax demands raised against them on the ground that their employer had deducted TDS from their salaries but not deposited it with the government. They sought a direction to the Income Tax Department to grant TDS credit and cancel corresponding demands.
Petitioners’ Arguments
The petitioners, represented by Advocate S. Adarsh, relied on several judicial precedents to argue that employees cannot be penalised for their employer’s default in remitting TDS. They cited CIT v. Eli Lilly & Company (India) Pvt. Ltd. [(2009) 15 SCC 1], Sanjay Sudan v. Asst. CIT [(2023) 452 ITR 107 (Delhi)], CIT v. Om Prakash Gattani [(2000) 242 ITR 638 (Gauhati)], Chintan Bindra v. CIT [2023 SCC OnLine Del 7539], and the unreported Aslam Checkar v. ITO (Bombay HC, W.P. (L) No. 2442 of 2024). These judgments, according to the petitioners, establish that once TDS is deducted from salary, the employee should not be made liable for recovery, even if the employer fails to remit it to the government.
