TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court
Sanjay Sudan (W.P.(C) 6610/2019)
The question before the ITAT was whether Whether the respondents/revenue can adjust the withheld tax which has not been deposited by the deductor in the Central Government Account, against the refund due and payable to the deductee/assessee in the future years?
Hon Delhi HC held as below:
- Section 205 of the Income Tax Act read with instruction dated 01.06.2015, clearly point in the direction that the deductee/assessee cannot be called upon to pay tax, which has been deducted at source from his income.
- The adjustment of demand against future refund amounts to an indirect recovery of tax, which is barred under Section 205 of the Act.
- The petitioner is right in as much as neither can the demand qua the tax withheld by the deductor/employer be recovered from him, nor can the same amount be adjusted against the future refund, if any, payable to him.