CA Bimal Jain | Dec 9, 2021 |
TDS credit to be allowed to Employee even if not deposited by the Employer
The Hon’ble Gujarat High Court in Kartik Vijaysinh Sonavane v. Deputy Commissioner of Income Tax [R/Special Civil Application No. 6193 of 2021 dated November 15, 2021] directed the Income-Tax Department (“the Department”) to allow tax deducted at source (“TDS”) credit to the assessee, even if the same is not deposited by the employer. Further held that, where tax has been deducted by an employer but not paid to the Central Government, the Department should resort to Section 201 of the Income-tax Act, 1961 (“IT Act”) to recover TDS from the employer.
Kartik Vijaysinh Sonavane (“the Petitioner”) is a pilot with Kingfisher Airlines (“the Employer”) that deducted TDS from the salary income of the Petitioner amounting to INR 7,20,100/- for the Assessment Year 2009-10 and INR 8,70,757/- for the Assessment Year 2011-12 respectively. However, the TDS amount had not been deposited by the Employer in the Central Government Account. Accordingly, the TDS credit as claimed by the Petitioner was denied by the Assessing Officer (“the Respondent”/ “AO”). The Respondent raised demand vide several demand notices with interest and initiated recovery proceedings.
Being aggrieved, the Petitioner has filed this writ petition against recovery notices.
Whether the Respondent can deny the benefit of TDS deducted by the Employer during the relevant financial years?
The Hon’ble Gujarat High Court in R/Special Civil Application No. 6193 of 2021 dated November 15, 2021 held as under:
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