Employee granted TDS Credit as the employer after deducting the TDS failed to deposit with the Government Treasury

 

The tax department contends that credit of TDS can be granted only if TDS is paid to central government by the deductor and not otherwise per section 199. In this case employer failed to pay the TDS to government after deduction.

However section 205 states that assessee cannot be called upon to tax himself to the extent to which TDS has been deducted on that income. Instruction dated 1.6.2015 reinforces this law.

Delhi High Court allows the writ of employee and the demand of TDS from employee is set aside. Even the Supreme Court of India has now affirmed on merits that income tax department cannot demand TDS from employee/ deductee.

One may refer the following:

1.  SC 2025 Special Leave Petition (Civil) Diary No. 54677/2025

2.  Delhi High Court Harshdip Singh Dhillon Versus Union Of India through The Commissioner Of Income Tax TDS- [2024] 470 ITR 355 (Del)

3.  Sanjay Sudan vs Assistant Commissioner of Income Tax, [2023] 148 taxmann.com 329 (Delhi)

4.  BDR Finvest Pvt. Ltd. vs DCIT, WP(C) 9043/2021 decided by DHC 31.10.2023

5.  Shri Chintan Bindra vs DCIT, 2023:DHC:8483-DB

6.  PCIT vs Jasjit Singh, 2023:DHC:8522-DB

7.  CBDT- The instruction dated 01.06.2015