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2022 (10) TMI 902 - ITAT DELHIDefault u/s 201 - TDS was not reflected in Form 26AS available - As submitted assessee has already suffered TDS denying its credit will lead to double taxation - CIT(A) was aware of the fact that EIEL is under Corporate Insolvency Process wherein appellant was employed at designation of Senior Vice President (Finance) [Sr. VP (Finance)] - HELD THAT:- Section 31(1) of the Insolvency and Bankruptcy Code ( hereinafter referred as IBC) after the amendment of 2019, makes the Resolution plan binding on Central Government in respect of payment of dues arising under any law for the time being enforce. Further section 238 of the IBC specifically provides that the IBC overrides the provisions of any law that is inconsistent with the IBC. In the case in hand EIEL was an assessee in default u/s 201 of the Act and sub-section 2 of Section 201 provides that such tax along with interest thereupon as recoverable under sub-section (1A), shall be a charge upon all the assets of the assessee in default. It is admitted fact that order u/s 201/ 201(1A) of the Act for the relevant financial year stands passed against the assessee in default EIEL who was employer of the appellant. That being so, having taken recourse under law by raising a demand for non-deposition of TDS u/s 201 and interest u/s 201(1A) of the Act and which stands further determined and admitted under the Corporate Insolvency Resolution Process then there could have been no justification under law to deny the credit to the assessee because as such the Government’s claim of TDS stands satisfied and cannot be said to be still outstanding. Even otherwise Section 205 of the Act is very crystal clear in its intention and clarifies that where tax stands deducted at source the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from the income. In the case in hand as noticed above, the deduction of tax from the salary of assessee is not disputed and Government’s claim of TDS stands satisfied under CRP and cannot be said to be still outstanding so as to deny its credit to the assessee. CIT(A) has been carried away by irrelevant facts of assessee himself occupying the position of Vice President (Finance) of the assessee in default company. Ld. CIT(A) failed to appreciate that there is no provision under law for creating such a liability upon any individual by attributing malice upon him for being party to the default in deposit of TDS. Appellant was for all purposes merely an employee who was being paid salary by the company which has a distinct and independent identity to its employees. Assessee has also established by an admitted pay slip for the December, 2015 that in fact the assessee had left the services working for 30 days in December, 2015. Thus, at the time of end of relevant FY, the assessee was not even in position of any nature qua responsibility to deposit the TDS on behalf of the assessee in default. No justification with Ld. CIT(A) to merely create a tax liability on grounds of propriety involved when otherwise there was no legal foundation. Thus substantial ground raised along with ancillary grounds no. 1 to 6 stand decided in favour of the assessee/appellant.
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