Home Income tax Individual Income Tax Employee cannot be held liable for Non Deposit of TDS deducted from his salary [Read Order]

Employee cannot be held liable for Non Deposit of TDS deducted from his salary [Read Order]

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Employee cannot be held liable for Non Deposit of TDS deducted from his salary [Read Order]

Worker can’t be held responsible for Non Deposit of TDS deducted from his wage [Read Order]

The Excessive Courtroom of Delhi within the matter HARSHDIP SINGH DHILLON Vs. UNION OF INDIA has dominated out that the Worker can’t be held responsible for Non Deposit of TDS deducted from his wage.

By the use of this petition introduced underneath Article 226 of the Structure of India, the petitioner has prayed for setting apart a requirement letter dated 04.02.2019 qua excellent tax legal responsibility pertaining to the Evaluation Yr 2013-14 and for permitting credit score to the petitioner in opposition to the Tax Deducted at Supply (TDS) for the evaluation 12 months 2013-14 by his employer. On discover of the petition, the respondent entered an look via counsel and filed a counter affidavit.

The petitioner was employed with Tulip Telecom Ltd. (hereinafter known as “the employer”) as Affiliate Vice-President throughout the interval from November 2011 to Could 2013 and resigned from service on 07.05.2013 with impact from 09.05.2013. For evaluation years 2011-12 and 2012-13, the employer of the petitioner deducted Tax at Supply (TAS) on the salaries paid to the petitioner however the deducted tax pertaining to the evaluation 12 months 2012-13 was not deposited by the employer with the Revenue Tax authorities. The employer of the petitioner additionally did not problem the requisite TDS certificates, so the petitioner knowledgeable the involved Revenue Tax Officers concerning the default, however no motion was taken.

The petitioner filed a petition in search of the winding up of the employer firm by the use of Firm Petition No. 192/2014 underneath Part 433(e) and (f) learn with Part 434 of the Corporations Act, by which a liquidator was appointed. As a substitute of granting credit score of the TDS pertaining to the evaluation 12 months 2012-13, the respondent/income issued an intimation dated 03.12.2015, thereby elevating the demand of Rs.15,77,240 in opposition to the petitioner in the direction of excellent tax legal responsibility. In response, the petitioner made numerous representations to the respondent/income informing them concerning the defaults on the a part of his employer. Finally, the respondent/income issued the impugned demand discover dated 04.02.2019, thereby once more elevating a tax demand of Rs.15,36,220 in opposition to the petitioner. For the reason that respondent/income didn’t make clear the scenario regardless of being approached by the petitioner, the current petition was filed.

The respondent/income in its counter affidavit didn’t dispute that the petitioner had acquired wage after the deduction of tax. However the stand taken by the respondent/income within the counter affidavit is that the quantity because of the petitioner in the direction of wage for the months of December 2012, January 2013 and March 2013 was not truly paid to the petitioner by his employer, so the employer had no obligation to deduct tax at supply and consequently the respondent/income is underneath no obligation to permit credit score of the identical.

On behalf of the income, it was additionally contended that the petitioner can’t be allowed a credit score of tax as a result of the credit score needs to be given in view of Part 199 of the Act solely when the tax deducted at supply is paid to the Central Authorities, which admittedly was not so paid on this case. This rivalry was raised additionally within the case of Sanjay Sudan (supra) however not accepted by this courtroom.

As held by this courtroom within the case of Shri Chintan Bindra vs DCIT, 2023:DHC:8483-DB, the petitioner, having accepted the wage after deduction of revenue tax at supply, had no additional management over it within the sense that thereafter it was the responsibility of his employer, performing as tax amassing agent of the income underneath Chapter XVII of the Act, to pay the deducted tax quantity to the Central Authorities in accordance with legislation; and for the employer of the petitioner having did not carry out his responsibility to deposit the deducted tax with the income, petitioner can’t be penalized. It could at all times be open for income to proceed in opposition to the employer of the petitioner for restoration of the deducted tax in accordance with the legislation.

The irresistible conclusion in view of the aforesaid is that because the petitioner accepted-salary after deduction of revenue tax at supply, it’s his employer who’s liable to deposit the identical with the income authorities and on this depend, the petitioner can’t be burdened. We discover no substantial query of legislation to be thought-about by us on this enchantment. Due to this fact, the petition is allowed and consequently, the impugned demand discover dated 04.02.2019 is put aside and the respondent/income is directed to permit credit score of TDS deducted by his employer for the Evaluation Yr 2013-14 to the petitioner.

For Official Judgment Obtain PDF Given Beneath:

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