Delhi HC: Recovery of TDS Deducted by Employer Not Permissible U/S 205 of IT Act

The Delhi High Court has ruled that the Tax Deducted at Source (TDS) by the employer cannot be reclaimed from the person from whom it was deducted, as stated in section 205 of the Income Tax Act, 1961.

Vishesh Khanna, the person who filed a Writ of Mandamus, requested that Respondent No. 1 cancel the outstanding payment, along with the accumulated interest, for the Assessment Year 2012-2013 and Assessment Year 2013-2014. This was done through the issuance of the contended notices.

Read also: CESTAT: Service Tax Can’t be Paid If TDS Already Deducted from Assessee’s Account

Additionally, the respondent was asked to reverse the challenged notification and return the requested refund amount, along with the legally required interest, for the Assessment Year 2019-2020.

Mr Varun Nagrath, the lawyer representing the petitioner/taxpayer, mentioned that he does not want to pursue the same issue because the taxpayer has already received a refund for the Assessment Year (AY) 2019-20.

Mr Aseem Chawla, the senior standing counsel representing the respondent/revenue, admitted that the tax deducted at source (TDS) by the employer cannot be recovered from the taxpayer due to the restrictions imposed by Section 205 of the Income Tax Act, 1961.

This matter has already been addressed in the judgment of a similar case, Sanjay Sudan v. Assistant Commissioner of Income Tax.

A division bench consisting of Justice Rajiv Shakdher and Justice Girish Kathpalia invalidated the demand and, as a result, the show-cause notice was withdrawn. The writ petition concludes in the aforementioned terms.