Case Law Details
Vishesh Khanna Vs DCIT & Ors. (Delhi High Court)
Delhi High Court Rules TDS Deducted but Not Paid by Employer Cannot be Recovered from Deductee in Vishesh Khanna Vs. DCIT & Ors. Case
Introduction: The Delhi High Court recently addressed a writ petition filed by Vishesh Khanna, challenging the outstanding demand raised against him for Assessment Year (AY) 2012-2013 and 2013-2014, along with other related issues. The central contention revolved around the recovery of Tax Deducted at Source (TDS) by the employer, which had not been paid.
Prayers Made by the Petitioner: The petitioner sought several reliefs in the writ petition, including quashing the outstanding demand for AYs 2012-2013 and 2013-2014, setting aside an intimation for AY 2019-2020, and restraining the respondents from proceeding with a show-cause notice dated 04.02.2020.
Court Proceedings:
- The petitioner decided not to press the relief sought in prayer Clause (B), concerning the intimation dated 23.09.2019 for AY 2019-2020, as the petitioner had already received the refund for that assessment year.
- The remaining prayers (A and C) were considered by the court. Mr. Aseem Chawla, learned senior standing counsel for the revenue, conceded that tax deducted at source by the employer could not be recovered from the petitioner, citing the restriction imposed by Section 205 of the Income Tax Act, 1961.
- The court referred to the judgment of a coordinate bench in the case of Sanjay Sudan v. Assistant Commissioner of Income-tax [223] 148 com 329 (Delhi), which had already addressed the issue of recovery of TDS from the deductee.
Court’s Decision:
- The court ruled that tax deducted at source by the employer cannot be recovered from the petitioner, relying on the precedent set by the Sanjay Sudan case.
- Consequently, the outstanding demand for AYs 2012-13 and 2013-14 was quashed, and the show-cause notice dated 04.02.2020 was rendered ineffective.
- The writ petition was disposed of in the aforementioned terms.
Conclusion: The judgment in the Vishesh Khanna case reinforces the principle established in previous judgments, emphasizing that TDS deducted but not paid by the employer cannot be recovered from the deductee. The court’s decision brings relief to the petitioner by quashing the outstanding demand and related proceedings for the specified assessment years.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has made the following prayers in the writ petition:
“(A) A Writ of Certiorari and/or a Writ of Mandamus and/or any other writ direction or order directing the Respondent No. 1 to quash the outstanding demand along with the accrued interest, for the Assessment Year 2012-2013 and Assessment Year 2013-2014, raised against the Petitioner, through the issuance of the Impugned Notices; dated 13.10.2014(Annexure P-1) 8 22.07.2015(Annexure P-2).
(B) A Writ of Mandamus, directing the Respondent No. 1 to forthwith set aside the Impugned Intimation dated 23.09.2019(Annexure P-3) and to return the refund amount sought by the Petitioner for the Assessment Year 201 9-2020, along with statutory interest.
(C) A Writ of Prohibition or a Writ in the nature of Prohibition and/or any other Writ, Order or direction restraining/prohibiting the Respondent No. 1 and Respondent No. 2 from proceeding or giving effect to and/or taking any steps in pursuance to the Impugned Intimation and the Impugned Show Cause Notice dated 04.02.2020(Annexure P-4).”
2. Insofar as the relief sought in prayer Clause (B) is concerned, Mr Varun Nagrath, learned counsel, who appears on behalf of the petitioner/assessee, says that he does not wish to press the same, as the petitioner/assessee has already been refunded the amount for Assessment Year (AY) 2019-20.
3. As regards remaining prayers i.e., (A) and (C) are concerned, Mr Aseem Chawla, learned senior standing counsel, who appears on behalf of the respondent/revenue, cannot but accept that tax having been deducted at source by the employer cannot be recovered from the petitioner in view of the embargo placed by Section 205 of the Income Tax Act, 1961 [in short, “Act”].
4. This issue is covered by the judgment of the coordinate bench rendered in Sanjay Sudan v. Assistant Commissioner of Income-tax [223] 148 com 329 (Delhi).
5. Accordingly, the demand for AYs 2012-13 and 2013-14 are quashed. Consequentially, the show-cause notice dated 04.02.2020 shall collapse.
6. The writ petition is disposed of, in the aforesaid terms.
7. Parties will act based on the digitally signed copy of the order.
can we take refund if we paid tax and not deducted tds as it was not paid by employee