IMPORTANT POINT
Section 205 of the Income Tax Act bars the recovery of tax withheld by the employer from the employee, and emphasizes the duty of the employer to deposit the deducted tax with the revenue in accordance with the law.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Girish Kathpalia, J.

1. By way of this writ petition under Articles 226 and 227 of the Constitution of India, petitioner has sought the following reliefs:

i. Issue a Writ of Certiorari or Mandamus or appropriate writ, direction or order setting aside the Impugned Intimation dated 15.01.2014 issued by the Respondent No. 3under Section 143(1) of the Act raising a demand of tax of Rs. 21,50,150/- (Rupees Twenty- One Lakh Fifty Thousand One Hundred and Fifty Only) for the Assessment Year 2012-13 as being arbitrary, illegal and unreasonable; and.

ii. Issue a Writ of Certiorari or Mandamus or appropriate writ, direction or order setting aside the Impugned Letters dated 02.12.2021 and 20.01.2022issued by the Respondent No.2 in the Petitioner's case under Section 143(1)(a) of the Act raising a demand of tax of Rs. 21,50,150/7 (Rupees Twenty-One Lakh Fifty Thousand One Hundred and Fifty Only) for the Assessment Year 2012-13as being arbitrary, illegal and unreasonable; and

iii. Issue a Writ of Certiorari or Mandamus or appropriate writ, direction or order directing the Respondents not to initiate any proceeding for recovery in accordance with Chapter XVII of the Act pursuant to the Impugned Letters.

iv. Issue such other order, Writ or direction as may deem fit by this Hon'ble Court".

On issuance of notice, the respondents/revenue entered appearance through counsel and filed a counter affidavit. We heard learned counsel for both sides.

2. Briefly stated, factual matrix relevant for present purposes is as follows.

2.1. The petitioner, employed with Kingfisher Airlines Limited since November 2006 as Head of Sales, Western Region was getting regular salary with tax deducted at source by his employer.

2.2. For Assessment Year (AY) 2012-13, petitioner filed return of his income on 31.10.2012 declaring his total income as Rs.59,42,410/- after deduction of tax and claimed credit of TDS to the tune of Rs.16,67,100/- and the self assessment of Rs.18,939/- paid on 30.09.2012.

2.3. In view of business conduct of his employer and salaries of employees remaining unpaid, petitioner resigned from service on 08.10.2013.

2.4. On 15.01.2014, respondent no. 3 issued intimation under Section 143(1) of the Act raising demand of Rs.16,83,765/- with interest to the tune of Rs.4,66,385/- for AY 2012-13. The petitioner sent reply dated 24.02.2014 informing that apparently his employer had not deposited the tax deducted at source, so the outstanding dues be recovered by the respondents from his employer. Thereafter vide letter dated 31.03.2014, petitioner further informed the respondents that he had received salary in Financial Year 2011-12 after deduction of tax but the same was not being reflected in Form 26AS for which petitioner could not be held liable so respondents should keep the demand in abeyance.

2.5. By way of circular dated 01.06.2015 followed by Office Memorandum dated 11.03.2016 of Central Board of Direct Taxes, it was reiterated that in accordance with Section 205 of the Income Tax Act, the assessee should not be called upon to pay tax to the extent the same had been deducted from his income where the tax is deductable at source under the provisions of Chapter XVII of the Act.

2.6. Subsequently, in the year 2019, petitioner came to know that by orders of Karnataka High Court, process of liquidation of his employer, the Kingfisher Airlines Limited had commenced, on 28.08.2019, so petitioner submitted there his affidavit of proof of debt.

2.7. On 02.12.2021, petitioner received a letter from respondents raising a demand of Rs.21,50,150/- towards outstanding tax for AY 2012-13. Again on 20.01.2022, petitioner received letter from respondents demanding the outstanding tax of Rs.21,50,150/- for AY 2012-13. On 25.01.2022, petitioner sent reply and requested the respondents to delete the incorrect demand. But to no avail.

2.8. Hence, the present writ petition.

3. The factual position pleaded by the petitioner and