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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, NISHA M. THAKORE, JJ.
KARTIK VIJAYSINH SONAVANE - Appellant
Versus
DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - Respondent
SPECIAL CIVIL APPLICATION NO. 6193 of 2021
Decided On : 15-11-2021
Income Tax Act, 1961 - Section 154, 205, 221(1), 203, 201 and 199 – Constitution of India, 1950 - Article 226 - Employee - Assessment - Deduction of Tax - Petitioner who is a pilot by profession and was an employee - Airlines deducted TDS to tune of Rs. 7,20,100/- for Assessment Year 2009-10 and Rs. 8,70,757/- for Assessment Year 2011-12 in case of petitioner - Amount since had not been deposited by Airlines in Central Government Account, credit when claimed by petitioner, same was obviously not given by respondent and demand had been raised with interest.
Finding of the Court:
In case where amount has been deducted but not paid to Central Government that eventuality is taken care of by Section 201 of Income-tax Act - Learned counsel for appellant could not show that under law it may be permissible to proceed against assessee even after deduction of tax at source, nor learned counsel for petitioner-respondent could persuade Court to hold that merely by deduction of tax at source, credit for deduction of tax at source has to be given even though amount may not have been made over to Government treasury - Reason for this has already been explained by Court in discussion held in earlier part of this judgment as mere deduction of tax at source would not close chapter of tax liability unless it is deposited in Government treasury - Facts being almost identical, no separate reasoning are desirable and petition is being allowed - Department is precluded from denying benefit of tax deducted at source by employer during relevant financial years to petitioner - Credit of tax shall be given to petitioner and if in interregnum any recovery or adjustment is made by respondent, petitioner shall be entitled to refund of same, with statutory interest, within eight (8) weeks from date of receipt of copy of this order.
Result: Petition disposed of.
ORDER :
1. Here is the petitioner who is a pilot by profession and was an employee of M/s. Kingfisher Airlines. The Kingfisher Airlines deducted the Tax Deducted at Source (‘TDS’ hereinafter) to the tune of Rs. 7,20,100/- for the Assessment Year 2009-10 and Rs. 8,70,757/- for the Assessment Year 2011-12 in case of the petitioner. The amount since had not been deposited by the Airlines in the Central Government Account, the credit when claimed by the petitioner, the same was obviously not given by the respondent and the demand had been raised with interest.
2. This since had aggrieved the petitioner, he approached this Court challenging the recovery notices dated 19.11.2013 and 21.08.2014 with the following prayers: -
(B) Issue a writ of certiorari and/or a writ of mandamus and/or any other writ direction or order directing the respondent to cancel the outstanding demand as reflected on IT Portal at Annexure-C and to cancel unjust demand raised by the respondent by issuance of recovery notices dated 19.11.2013 at Annexure -F, notices dated 21.08.2014 at Annexure- J (Colly) and notice issued on 22.12.2015 at Annexure- K, and to return the amount already adjusted by the respondent along with statutory interest.
(C) Award the cost of this petition.
(D) Grant such other and further reliefs as this Hon’ble Court deems fit.”
3. It is averred that the petitioner had filed the return of income for the assessment years 2009-10 and 2011-12 and he claimed the TDS of Rs. 7,20,100/- and Rs. 8,70,757/- respectively as the tax paid in advance.
3.2. He preferred an application under Section 154 of the Income Tax Act before the respondent no. 1 on 29.03.2010 and sought the refund for the assessment year 2009-10. On 19.11.2013, a notice had been issued to the petitioner for recovery of the outstanding arrears to the tune of Rs. 11,26,775/- for the assessment year 2011-12.
3.3. The request was made by the petitioner for canceling the demand for the assessment year 2009-10 vide its communication dated 07.12.2013. He also filed an application under Section 154 of the IT Act on 18.12.2013 for the assessment year 2011-12 and made a similar request to the respondent no.1. He reiterated such request in a combined manner on 17.09.2014 and urged for the cancellation of the demands.
3.4. His essential plea was that the obligation of the employer cannot be thrust upon him however, paying no head to such a request, the respondent issued the recovery notice on 21.08.2014 for both the assessment years 2009-10 and 2011-12.
3.5. Once again, the demand notice had been issued on 22.12.2015 for the assessment year 2011-12. The petitioner made request on 13.01.2016 to the respondent to drop the recovery proceedings and cancel the demands. This was reiterated on 23.12.2019.
3.6. As all such requests fell on deaf ears, he has chosen to approach this Court with the aforementioned prayers.
4. The affidavit-in-reply is filed by the respondent – Joint Commissioner of Income Tax (OSD), Circle 1(1)(1), Vadodara, who inter alia stated that the petitioner failed to disclose the violation of any of his statutory or constitutional right and hence, the petition under Article 226 cannot be maintained.
4.1. According to respondent, it was a duty of the petitioner to join the necessary parties i.e. the Kingfisher Airlines as according to the petition
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