Case Law Details
CA Sandeep Kanoi
It is not disputed that tax was deducted at source by the tenant Union Motors Services Limited and they have issued some Certificates which has been given credit to by the Department. The present dispute relates to the failure of non issuance of TDS certificates by the tenant. The mandate is on the tenant to deduct tax at source and remit the amount to the Government and also issue certificate to the assessee.
Sec.205 of the Income Tax Act reads as follows:
“205. Bar against direct demand on assessee._ Where tax is deductible at the source under sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 195 and section 196A, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income”.
The plain reading of the section makes it clear that whenever tax is deductible under the provisions of this Act and where the tax has already been deducted, no demand can be raised on the deductee. This implies that to the extent of TDS, demand cannot be raised on the deductee. However, for the failure on the part of the deductor, suitable provisions are available in section 201 and other sections mentioned supra.
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Author Bio
Unfortunately assessing officers are not following sec 205 of incometax act.I am being asked to pay income tax despite the fact that form 26AS, TDS certificate are showing that tax has been deducted by the deductor.
While on the subject of grant of credit for TDS under the Income-tax Act I would invite discussion on grant of input credit for taxes paid on purchases under the MVAT Act.
Taking recourse to section 48(5) the Sales Tax Authorities in Maharashtra deny credit for taxes paid by them on genuine purchases made by them on grounds that the purchaser has not filed returns or paid taxes. Input credit claimed is denied to them. The purchaser is forced to prove that his seller has filed the return and paid the tax. If it is not so proved, the purchaser is again made to pay the tax to the department. This is wholly unjust, unfair and against principles of natural justice.
How can a purchaser prove that the tax collected by a seller is paid by him to the Government department.
The department in such cases should, at the request of the buyer, issue summons to the seller and allow him to cross examine him before the authorities.
There should be some solution to this legal or political.