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Harshdip Singh Dhillon v. Union of India Through Commissioner of Income Tax TDS

WP©10828/2019

Before Delhi High Court

The bench of Hon’ble Mr. Justice Girish Kathpalia & Hon’ble Mt. Justice Rajiv Shakdher allowed the Writ and set aside the demand notice dated 04.02.2019.

The Respondent were directed to allow credit of TDS deducted by his employer for the Assessment Year 2013-14 to the petitioner vide judgment dt. 04.01.2024.

Background

The petitioner-Harshdip Singh Dhillon has prayed for setting aside demand letter dated 04.02.2019 qua outstanding tax liability pertaining to the Assessment Year 2013-14 and for allowing credit to the petitioner against the Tax Deducted at Source (TDS) for the assessment year 2013-14 by his employer.

Respondent entered appearance through counsel and filed counter affidavit.

Facts

The petitioner was employed with Tulip Telecom Ltd. as Associate Vice-President during the period November 2011 to May 2013 and he resigned from service on 07.05.2013 with effect from 09.05.2013.

For assessment years 2011-12 and 2012-13, the employer of the petitioner deducted Tax at Source (TAS) on the salaries paid to petitioner but the deducted tax pertaining to the assessment year 2012-13 was not deposited by the employer with the Income Tax authorities.

The employer of petitioner also failed to issue the requisite TDS certificate, so the petitioner informed the concerned Income Tax Officials about the default, but no action was taken.

The petitioner filed a petition seeking winding up of the employer company by way of Company Petition under Section 433(e)&(f) read with Section 434 of the Companies Act, in which liquidator was appointed.

Instead of granting credit of the TDS pertaining to the assessment year 2012-13, the respondent issued intimation dated 03.12.2015, thereby raising demand of Rs.15,77,240/- against the petitioner towards outstanding tax liability.

The petitioner made various representations to the respondent/revenue informing them about the defaults on the part of his employer. Ultimately, the respondent/revenue issued the impugned demand notice dated 04.02.2019, thereby again raising a tax demand of Rs.15,36,220/- against the petitioner. Since the respondent/revenue did not clarify the situation despite being approached by the petitioner, the present petition was filed.

Submission of the Respondent

The respondent/revenue in its counter affidavit did not dispute that the petitioner had received salary after deduction of tax.

The amount due to the petitioner towards salary for the months of December 2012, January 2013 and March 2013 was not actually paid to the petitioner by his employer, so the employer had no obligation to deduct tax at source and consequently the respondent/revenue is under no obligation to allow credit of the same.

Issue

Whether any recovery towards the outstanding tax demand can be effected against the petitioner in view of the admitted position that the tax payable on his salary was being regularly deducted at source by his employer who did not deposit the same with the authorities.

Observation of Court

Since the petitioner accepted salary after deduction of income tax at source, it is his employer who is liable to deposit the same with the revenue authorities and on this count, the petitioner cannot be burdened.

We find no substantial question of law to be considered by us in this appeal.

Seema Bhatnagar