TMI Blog2014 (8) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... ich Form No.16A issued by the employer deductor – M/s. Amar Remedies Limited has been produced – revenue is directed to give credit of tax deducted at source to the assessee to the extent form no.16 A issued by the deductor have been issued – Decided in favour of Assessee. - Special Civil Application No. 2349 of 2014 - - - Dated:- 23-6-2014 - M. R. Shah And K. J. Thaker,JJ. For the Petitioner : Mr. Ketan H. Shah For the Respondents : Mrs. Mauna M. Bhatt JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) 1. Rule. Ms. Mauna Bhatt, learned advocate waives service notice of Rule on behalf of respondent. In the facts and circumstances of the case and with the consent of the learned advocates for the respective parties, the present Special Civil Application is taken up for final hearing today. 2. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, direction and order quashing and setting aside the recovery notice dated 06.01.2012 (Annexure D), by which, the petitioner assessee has called upon to pay demand of ₹ 6,82,148/- raised under Section 143(1) of the Income Tax Act, 1961 (he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies was duly signed by one Srinivas D. Samudra, Accounts Manager of Amar Remedies Limited, Mumbai. It is also the case on behalf of the petitioners that petitioner has also received Form No.16 A dated 22.08.2010 under Section 194J for TDS of ₹ 24,00,000/in reference to professional charges of ₹ 24,00,000/- from M/s. Amar Remedies Limited wherein the details regarding TDS return filed by the deductor and the PAN and TAN number were also mentioned by them. It is submitted that the said TDS of ₹ 2,40,000/- was deposited by cheque no.776 on 24.07.2010 vide challan no.47008 and BSR Code No.261632 of the Bank. 3.3. It is the case on behalf of the petitioner that despite the above and without giving credit of the tax deducted at source at ₹ 5,86,606/-, demand of ₹ 6,82,148/- has been raised. 3.4. It is the case on behalf of the petitioner that immediately on receipt of impugned notice under Section 221(1) of the Act, the petitioner addressed a letter dated 13.1.2012 drawing the attention of the authority submitting that so called demand raised may be pertaining to non giving of proper credit of TDS claimed from M/s. Amar Remedies Limited. It is the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 and 16A has been issued by the deductor, the department bound to give the credit to the tax deducted at source of ₹ 5,86,606/-. It is submitted that therefore, the impugned demand / recovery notice without giving credit of TDS of ₹ 5,86,606/- is absolutely illegal and most arbitrary which deserves to be quashed and set aside. 4.1. Shri Shah, learned advocate for the petitioner has heavily relied upon the decision of the Gauhati High Court in the case of ACIT vs. Om Prakas Gattani reported in (2000) 242 ITR 638 and the decision of the Bombay High Court in the case of Yashpal Sahni vs. ACIT reported in (2007) 293 ITR 539. Shri Shah, learned advocate for the petitioner has also relied upon the another decision of the Bombay High Court in the case of Director of Income Tax (International Taxation) vs. NGC Network Asia Lic reported in (2009) 313 ITR 187(Bom) as well as decision of the Karnataka High Court in the case of Smt. Anusuya Alva vs. Deputy Commissioner of Income Tax and Others reported in (2005) 278 ITR 206 (Karn) as well as decision of the Division Bench of this Court in the case of Commissioner of Income Tax vs. Ranoli Investment P. Ltd. and others reported i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evidence regarding claimed of ₹ 3,37,333/- has been provided by the deductor till date. It is further stated in the said communication that after availability of ITD and BCP, deductee details in the case of ARL have been uploaded from ITD systems by the Mumbai office and found that in quarter 4 of 24Q ₹ 1,58,486/- and in quarter 4 of 26Q ₹ 2,40,000/- deposited on 31.3.2010 in the name of Shri Devendra Rajani. It appears that assessee mentioned wrong PAN-AAHPR3027C instead of PAN: AAHPR3027P for the quarter 4 of 24Q. It is stated that the deductor has been asked to submit the details in the case of assessee vide letter dated 22.5.2014 and 30.5.2014, however no reply has been received till date. It is further stated that in absence of details / evidence from the deductor side, the Department may give the credit of TDS amounting to ₹ 2,40,000/- and further of ₹ 1,58,486/- only as available with the ITD systems. It is further stated that in future if the details of so claimed TDS provided by the deductor the department may give the credit of the same after due verification. The said communication dated 12.06.2014 is directed to be taken on record. Consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d considering Sections 204 and 205 when the deductor who is liable to deduct the tax at source under Chapter XVII deducts the TDS and issued form no.16A the assessee deductee shall be entitled to credit of the same. As stated above and as per Section 205 of the Act whether tax is deductible at the source under Chapter XVII, the assessee shall not be called upon to pay the tax himself to the extent of which tax has been deducted from that income. Meaning thereby, the assessee / deductee is entitled to credit of such amount of TDS. Assuming that in a given case the deductor after deducting the TDS may not have deposited with the department. However, in such situation, the department is to recover the said amount from the deductor and assessee deductee cannot deny the credit of the same. Identical question came to be considered by the Bombay High Court in the case of Yashpal Sahni (supra) and considering Section 205 of the Act in para 15 of the Bombay High Court has observed as under: 15.Chapter XVII of the IT Act, 1961 provides for collection and recovery of tax by two modes. They are (one) directly from the assessee and (two) indirectly by deduction of tax at source. In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all. It may or may not fall in a different category from one where the amount has been deducted and not made over to the Central Government. We are concerned with the latter category of cases. As indicated earlier, on the facts it is nobody's case that the amount was actually not deducted at source by Chandra Agencies. What seems to be in dispute is the deposit of the said amount in the account of the Central Government. The Income tax Department seems to have made enquiries about the exact date of payment to the Central Government which Chandra Agencies could not furnish on the ground that the papers were forwarded to the chairman of Vaibhavshali Bumper. In such a category of cases we feel that the amount of tax can be recovered by the Income tax Department treating the person responsible to deduct tax at source as an assessee in default in respect of the tax. It would not be possible to proceed to recover the amount of tax from the assessee. The assessee cannot be doubly saddled with the tax liability. Deduction of tax at source is only one of the modes of recovery of tax.. Once this mode is adopted and by virtue of the statutory provisions the person responsible to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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