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2019 Supreme(Bom) 2340
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Akil Kureshi, M.S. Sanklecha, JJ.
Pushkar Prabhat Chandra Jain - Appellant
Versus
Union Of India & Anr. - Respondents
Writ Petition No. 90 of 2019
Decided On : 30-01-2019
Ms. Neha Anchliya with Mr.Naresh Jain i/by M/s Argud Partners, Advocates, for the Appellant; Mr. Sham Walve, Advocate, for the Respondent
Headnote:
Income Tax Act, 1961 - Section 226(3), 194 IA and 205 - Immovable property - Return of income – Income tax - Petitioner had sold an immovable property under a deed dated for total consideration of Rs. 9 crores - Purchasers of said property had made a net payment of Rs. 8 crores 91 lakhs to petitioner after deducting tax at source at 1% of payment - Petitioner filed the return of income for assessment year declaring total income - In such return of income electronically filed by petitioner, he had claimed a total of TDS - Central Processing System of Income Tax Department noticed that only an amount was deposited with Government revenue and thus gave credit of TDS to petitioner only to extent of such sum - Mismatch of TDS claimed by petitioner and recognized by department was on account of fact that purchasers of the immovable property from petitioner, had not deposited sum of Rs. 9 lakhs deducted from petitioner while making payment of sale consideration - Whether tax deducted at source has been paid to Central Government or not - Whether revenue can recover the TDS amount with interest once again from the petitioner? - Held, petitioner-assessee has established that from his salary income, tax has been deducted at source by employer-respondent No. 6 and therefore, revenue has to recover said TDS amount with interest and penalty from respondent No. 6 alone and revenue cannot seek to recover said amount from petitioner-assessee in view of specific bar contained under Section 205 of Act – Department does not contend that petitioner did not suffer deduction of tax at source at hands of payer, but contends that same has not been deposited with Government revenue - As provided under Section 205 of Act and as elaborated by this Court in case of Yashpal Sahni (supra) under such circumstances petitioner cannot be asked to pay same again - It is always open for department and infact Act contains sufficient provisions, to make coercive recovery of such unpaid tax from payer whose primary responsibility is to deposit same with Government revenue scrupulously and promptly - Petition is disposed of
JUDGMENT
Akil Kureshi, J. - Heard learned counsel for the parties for final disposal of the petition.
2. Petitioner has challenged a notice dated 5th February, 2018 issued by the respondent No. 2 Income Tax Officer under section 226(3) of the Income Tax Act, 1961 ("the Act" for short). The petitioner has further prayed for refund of a sum of Rs. 3,67,600/ already recovered from the petitioner and to permanently restrain the respondents from recovering balance amount of Rs. 6,69,250/for which a further notice dated 10th September, 2018 was issued by the respondent No. 2.
3. Brief facts are as under :
Petitioner is an individual. The petitioner had sold an immovable property under a deed dated 23rd November, 2015 to Mr. and Mrs. Bhanpurwala for total consideration of Rs. 9 crores. The purchasers of the said property had made a net payment of Rs. 8 crores 91 lakhs to the petitioner after deducting tax at source at 1% of the payment in terms of section 194 IA of the Act.
4. The petitioner filed the return of income for the assessment year 2016-17 on 12th October, 2017 declaring total income of Rs. 2,28,62,110/. In such return of income electronically filed by the petitioner, he had claimed a total of TDS of Rs. 10,71,187/. The Central Processing System of the Income Tax Department noticed that only an amount of Rs. 1,71,187/was deposited with the Government revenue and thus gave credit of TDS to the petitioner only to the extent of such sum. This mismatch of the TDS claimed by the petitioner and recognized by the department was on account of the fact that purchasers of the immovable property from the petitioner, had not deposited the sum of Rs. 9 lakhs deducted from the petitioner while making payment of the sale consideration. In an intimation issued by the respondent under Section 143(1) of the Act, therefore, a demand of Rs. 10,36,850/was raised against the petitioner. This comprised of the principal tax of Rs. 9 lakhs for which the TDS credit was not granted and interest payable thereon. Subsequently, the return of the petitioner was taken in limited scrutiny on specific three grounds which did not include the question of TDS mismatch. Be that it may, during the pendency of such scrutiny assessment proceedings the respondent No.2 issued the impugned notice dated 5th February, 2018, which was addressed to the Branch Manager of State Bank of India attaching the bank account of the petitioner in the said bank for recovery of an amount of Rs. 10,36,000/. On 26th March, 2018, the respondent No.2 withdrew a sum of Rs. 2,46,900/from the petitioner''s said bank account. A further sum of Rs. 1,20,700/was withdrawn from the same account on 6th April, 2018. Thus, a total of Rs. 3,67,600/came to be withdrawn by the department from petitioner''s bank account for recovery of the said unpaid demand. The petitioner represented to the department under communication dated 6th April, 2018 and objected to the attachment of the bank account pointing out as under:
(i) The petitioner had noticed that there was a shortfall of TDS of Rs. 9 lakhs which can relate only to the tax deducted at source by the purchaser of the flat which may not have been deposited with the department.
(ii) The purchasers had already deducted the tax at source in terms of Section 194IA of the Act. The petitioner has already offered the sale consideration of Rs. 9 crores to tax in the return filed.
(iii) The petitioner referred to Section 205 of the Act and contended that in a situation like the present case, recovery can be made only against the deductorpayee. The petitioner can not be asked to pay the said amount again.
5. The respondent did not accept the representation of the petitioner upon which the present petition has been filed.
6. Facts on record are not seriously in dispute. As noted, the petitioner sold an immovable property for sale consideration of Rs. 9 crores. The purchasers paid only Rs. 8 crores 91 lakhs retaining Rs. 9 lakhs towards TDS. The department does
