TMI Blog2023 (10) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... extent to which tax has been deducted from his income. No doubt, Form 16A is amongst others, a piece of evidence which can establish deduction of tax at source. That said, Form 16A is not the only piece of evidence in that regard. In a case where the assessee can show reliable material other than Form 16A and prima facie establish the deduction of tax at source, in our view the assessee cannot be denied benefit of the provisions of Section 205 of the Act. The assessee cannot be left at mercy of the tax deductor, who for multiple reasons may not issue Form No. 16A and/or may not deposit the deducted tax. In the present case, the non-applicant/assessee admittedly declared in his return of income the tax deducted at source by tax deductor and supported the same with his ledger account. We are not oblivious that ledger account is not the conclusive evidence. But at the same time, we find no reason for failure on the part of the review applicant to carryout any inquiry if they were not satisfied about truthfulness of claim of the nonapplicant/assessee qua the tax deducted at source. Not only this, the non-applicant/assessee even filed a complaint with the revenue authorities al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew application is condoned. 3. We have heard learned counsel for both sides on the review application. For convenience, the order dated 31.05.2023 sought to be reviewed is extracted below: W.P.(C) 7797/2023 2. Issue notice. 3. Mr Abhishek Maratha, learned senior standing counsel, who appears on behalf of the respondent/revenue, accepts notice. 4. Mr Maratha cannot but accept that the issue raised in the present writ petition is covered by the judgment of this court dated 17.02.2023, passed in WP(C) 6610/2019, titled Sanjay Sudan v. The Assistant Commissioner of Income Tax Anr. 4.1 In this context, Mr Maratha says that a counter-affidavit is not required to be filed, as the instant writ petition concerns a pure question of law. 5. Broadly the facts obtaining the case are as follows: 6. This writ petition concerns Financial Year (FY) 2010-11 [Assessment Year (AY) 2011-12]. 7. The petitioner had, as it appears, provided services to an entity going by the name Clutch Auto Ltd. (CAL). The value of the service provided amounted to Rs. 8,50,26,199/-. The said entity, i.e., CAL, deducted tax at source amounting to Rs. 24,96,199/-. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. For the sake of convenience, paragraph 2 of the said Instruction is extracted hereafter: 2. As per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per Section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter-XVII. Thus the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively 9. The question, therefore, which comes to fore, is as to whether the respondents/revenue can do indirectly what they cannot do directly. 9.1 The adjustment of demand against future refund amounts to an indirect recovery of tax, which is barred under Section 205 of the Act. 9.2 The fact that the instruction merely provides that no coercive measure will be taken against the assessee, in our view, falls short of what is put in place by the legislature via Section 205 of the Act. 10. Therefore, in our view, the petitioner is right inasmuch as neither c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non-applicant/assessee did not produce Form No. 16A, therefore, the review applicant is not certain if the tax was actually deducted at source. No other contention was raised on behalf of the review applicant in support of their argument that the judgment in the case of Sanjay Sudan (supra) would not operate in the present case. 5. On the other hand, learned counsel for non-applicant submitted that the tax deductor Clutch Auto Ltd did not issue Form 16A, and it was not possible for the non-applicant/assessee to obtain the same. Learned counsel for non-applicant/assessee placed reliance on the judgment of Bombay High Court in the case of Yashpal Sahni vs Rekha Hajarnavis, ACIT, reported as 2007 SCC OnLine Bom 1315 , and contended that the impugned order is based on cogent reasons, so not liable to be unsettled. 6. Thence, the only question before us is as to whether this court fell in error apparent on the face of record in placing reliance on the judgment in the case of Sanjay Sudan (supra). 7. There is no dispute that in the present case, it was mandatory duty of Clutch Auto Ltd to deduct tax at source qua the payments made to the nonapplicant/assessee. Also not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Company Law Tribunal for initiation of insolvency process but did not raise even a whisper of challenge to the claim of the non-applicant/assessee qua the tax deducted at source. 11. Despite the aforesaid, concerned officers of the review applicant opted not to quench their baseless doubt by way of detailed inquiry qua deduction of tax at source and came up with this review application raising the unsustainable differentia of Form 16A. The review applicant being the State and the non-applicant/assessee being the citizen, the latter cannot be burdened with the responsibility to somehow procure Form 16A to secure benefit of the provision of Section 205 of the Act. 12. We are in respectful agreement with the view taken by the Bombay High Court in the case of Yashpal Sahni (supra) to the effect that from language of Section 205 of the Act, it is clear that the bar operates as soon as it is established that the tax had been deducted at source and it is wholly irrelevant as to whether the tax deducted at source is deposited or not and whether Form No. 16A has been issued or not. 13. In view of the aforesaid, we are unable to find any error, much less an error apparent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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