The court affirmed that an employee is entitled to TDS credit despite the employer's failure to deposit it, preventing unjust tax liability on the employee.

JUDGMENT :

Bhargav D. Karia, J.

1. Heard learned advocate Mr. B.S.Soparkar for the petitioner and learned Senior Standing Counsel Mr. Varun Patel for the respondent.

2. Rule returnable forthwith. Learned advocate Mr. Senior Standing Counsel Varun Patel waives service of notice of rule for the respondent.

3. Having regard to the controversy involved which is in narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.

4. By this petition under Article 226 of the Constitution of India , the petitioner has challenged the demand raised by the respondent by Email dated 28.02.2024 showing outstanding dues against AY 2009- 10 is Rs. 18,13,250/- and AY 2011-12 is Rs. 1,60,120/-.

5. Brief facts of the case are that:

5.1 The Petitioner was employed by Kingfisher Airlines Limited as a pilot from November 2008 to July 2010. During the Financial Year 2008-09 and 2010-11, the Employer deducted Tax At Source out of the salary of the petitioner Rs. 8,34,099/- and Rs. 3,34,243/- respectively but failed to deposit the same with the Income Tax Authorities.

5.2 For the Assessment Year 2009-10, the Petitioner filed return of income declaring total income of Rs.49,26,000/-on 30.04.2010 claiming the credit of TDS of Rs 8,34,099/-which the employer deducted from the Salary. However, since the employer did not deposit the same with Income Tax Authorities, the return of income filed by the Petitioner was processed u/s 143(1) of the Income Tax Act,1961 [‘the Act’ for short] on 13.04.2011 by Jurisdictional Assessing Officer without giving credit for the same and raising demand of Rs. 11,42,390/-.

5.3 Petitioner filed Return of income for subsequent period and the same were processed u/s 143(1) of the Act. In the event of the refund due to the Petitioner, the same was adjusted against the demand of AY 2009-10 or AY 2010-11 as in the table below:

5.4 Meanwhile on 27.01.2015 and 08.07.2015, the petitioner filed an application for rectification u/s 154 of the Act against the demand raised in the intimation for AY 2009-10 and adjustment of refunds of subsequent years.

5.5 The Jurisdictional Assessing Officer passed an order rejecting the rectification application which was assailed before CIT (Appeals) who by order dated 02.02.2018 directed the Jurisdictional Assessing Officer to rectify the mistake apparent on record by verifying the contention of the Petitioner. For long time, no order giving effect to the order of the CIT(A) was passed. The Petitioner thereafter requested the Jurisdictional Assessing Officer to g