Now a two-judge bench of Gujarat high court has given a judgement over the non-recovery of tax deducted at source petition over which the bench said that the tax department cannot take away the TDS from the employee in case the defaulter is the employer.
The petitioner here is the pilot of Kingfisher airlines which had opposed the department action against him as the tax department demanded the liable TDS from the petitioner itself.
The amount was Rs.2,68,498/- as tax at source on salary payments which was deducted from the employer but who further failed to deposit the tax to the government.
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The department demanded the tax along with the interest and also adjusted a refund of Rs.47,140 for another assessment year from the petitioner.
The petitioner said that the department has wrongfully demanded the tax and is also against the statutory provisions. The case was between Sumit Devendra Rajani vs. Assistant Commissioner of Income tax.
The full statement of the HC two-judge bench is, “Under the circumstances, by allowing these petitions we hold that the Department cannot deny the benefit of tax deducted at source by the employer of the petitioner during the relevant financial years. The credit of such tax would be given to the petitioner for the respective years. If there has been any recovery or adjustment out of the refunds of the later years, the same shall be returned to the petitioner with statutory interest.”