TMI Blog2023 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the CPC in not giving credit of TDS amount of Rs.10,11,000/-. 3. Facts of the case, in brief, are that the assessee is an individual and filed his return of income for the impugned A.Y on 31.10.2019 declaring total income at Rs.1,57,94,132/- and paid tax of Rs.53,85,276/- consisting of advance tax of Rs.30,00,000/- and tax deducted at source of Rs.25,05,786/- and claimed a refund of Rs.1,20,510/-. The CPC Bengaluru in the intimation u/s 143(1) did not give credit of Rs.10,11,000/- being the TDS u/s 194IA of the Act by Mr. Pradeep Ramrakhyani. 4. The assessee filed an appeal before the CIT(A)-NFAC and the CIT (A) NFAC upheld the action of the CPC by observing as under: 4. The submissions made by the appellant have been given careful consideration. From the details filed by the assessee, it has been noticed that during the year under consideration, the assessee sold his immovable property for a consideration of Rs.10,11,00,000/-. The contention of the assessee is that while making the purchase consideration, the vendee/agreement holder Mr.Pardeep Ramrakhyani had deducted TDS of Rs.10,11,000/- under the provisions of section 1941A of the Act, but the same was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal consideration of Rs. 10,11.00,000/- vide an Agreement of Sale cum-General Power of Attorney with Possession, registered with Sub Registrar, Secunderabad on 13.02.2019 vide document No.443 of 2019. While making the purchase consideration to the assessee, the Vendee/Agreement Holder Mr. Pradeep Ramrakhyani, has deducted TDS @ 1% of the sale consideration amounting to Rs. 10,11,000/- as per the provisions of section 194IA of the Income Tax Act, 1961 as the consideration is in excess of Rs.50,00,000/- and paid the balance amount to the assessee accordingly. The same was affirmed by the Vendee even at page No 6 at Point No.3 of the said registered document which can be taken as a proof that the vendee has deducted the tax component and withheld said TDS amount. Therefore, it is clearly established from the deed which was registered that the vendee has deducted tax at source. As the tax was deducted under section 194lA by the vendee, it is his duty to remit the same, upload Form 26QB and issue TDS certificate in Form No.16B. However, the vendee has not given the required form in Form 16B for deduction of Tax at Source to the assessee in spite of repeated requests before filing the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able property for a consideration of Rs.10,11,00,000/- to one Mr. Pradeep Ramrakhyani who deducted TDS of Rs.10,11,000/- under the provisions of section 194IA but the same was not deposited by the vendee into the credit of the Central Govt. A/c and he had not uploaded Form No.26QB. We find the CPC therefore, did not give TDS credit of Rs.10,11,000/- in the intimation passed u/s 143(1) and the CIT (A)-NFAC upheld the action of the CPC, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the learned Counsel for the assessee that once the deductor has deducted the tax at source withholds tax out of payments due/paid to the assessee, but does not deposit the tax withheld by it, the assessee should not suffer for the same and due credit of the TDS is to be given to the assessee and action under the provisions of the Act can be taken against the deductor who after deducting the tax has not deposited the same to the credit of the Central Govt. 11. We find merit in the above arguments of the learned Counsel for the assessee. A perusal of the agreement of sale cum GPA dated 12.02.2019, a copy of which is placed in the paper book, shows t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which is withheld by the deductor out of the amount due to the deductee i.e. person to whom the payments are made, then the said deduction shall be treated as payment of tax on behalf of the person from whom such deductions was made, as per the provisions of section 199(1) of the Act. Further there are provisions under the Act dealing with the recovery of tax at source from the person who have withheld the same. In terms of section 205 of the Act, the assessee/deductee cannot be called upon to pay tax, to the extent to which tax had been deducted from the payments due. Consequently, it follows that credit for such tax deducted at source, which is deducted from the account of the deductee, by the deductor, is to be allowed as taxes paid in the hands of the deductee, irrespective of the fact whether the same has been deposited by the deductor to the credit of the Central Government or not. The deductee in such circumstances cannot be denied credit of tax deducted at source on its behalf. Under the Act, the provisions are enshrined under which recovery of tax from the account of the person, who had deducted the such tax, are provided. Accordingly, we hold that where the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax has been deducted at source from the salary of the employee, the bar under Section 205 of the Act comes into operation and it is immaterial as to whether the tax deducted at source has been paid to the Central Government or not, because elaborate provisions are made under the Act for recovery of tax deducted at source from the person who has deducted such tax. 21. In the present case, the petitioner assessee has furnished monthly pay slips and bank statements to show that from his salary tax was deducted at source by the employer respondent No. 6. Authenticity of the said pay slips and bank statements have not been disputed by the revenue. Thus, it is clear that the tax has been deducted at source by the respondent No. 6 from the salary paid to the petitioner. Therefore, the only question to be considered is, if the employer respondent No. 6 has failed to deposit the tax deducted at source from the salary income of the petitioner to the credit of the Central Government, whether the revenue can recover the TDS amount with interest once again from the petitioner? 22. In the present case, though the respondent No. 6 has deducted the tax at source from the salary income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act provides that such person shall be deemed to be an assessee in default and the revenue will be entitled to recover the TDS amount with interest at 12% p.a. and till the said TDS amount with interest is recovered there shall be a charge on all the assets of such person or the company. Penalty under Section 221 of the Act and rigorous imprisonment under Section 276B of the Act can also be imposed upon such defaulting person or the company. Thus, complete machinery is provided under the Act for recovery of tax deducted at source from the person who has deducted such tax at source and the revenue is barred from recovering the TDS amount from the person from whose income, tax has been deducted at source. Therefore, the fact that the revenue is unable to recover the tax deducted at source from the person who has deducted such tax would not entitle the revenue to recover the said amount once again from the employee assessee, in view of the specific bar contained in Section 205 of the Act. 24. As stated earlier, in the present case the petitioner assessee has established that from his salary income, tax has been deducted at source by the employer respondent No. 6 and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, the assessee has already been relieved of the amount. 8. Section 205 of the Act reads as under: 205. Bar against direct demand on assessee : Where tax is deductible at the source under Sections 192 to 194, Section 194A, Section 194B, Section 194BB, Section 194C, Section 194D, Section 194E, Section 194EE, Section 194F, Section 194G, Section 194H, Section 194-I, Section 194J, Section 194K, Section 195, Section 196A, Section 196B, Section 196C and Section 196D, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income. On a plain reading of this provision, it is very clear that in a situation where the tax is deductible at source under Section 194-I of the Act, as in the present case, and to the extent to which the tax has been deducted from the income, the assessee shall not be called upon to pay the tax himself/herself to such extent. That means what the section provides for is to put an embargo or prohibition from raising a demand on the assessee in respect of the amount, which was deductible and actually deducted to the extent it has been deducted. The section by itself does not say that the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce representing 20 per cent of the monthly rent payable as envisaged under Section 194-I of the Act is concerned, the deduction is under the statutory obligation and on behalf of the Revenue and because of the compulsion herein. It is not as if the petitioner could prevent such deduction. When the person like a tenant acts as a representative or agent of the Revenue for such deduction and if there is any violation on his/her part, the consequence should fall only on the Revenue and that cannot be foisted on the assessee. It is no doubt true that the assessee if pays the tax in terms of the tax liability, i.e., under the assessment order and to the extent of the amount is not paid to the Government remains a liability on the assessee also and could look upto the tenant to recover the amount for reimbursement. The question in the light of the provisions is that, should the assessee be driven to that plight ? I think that the provision is to provide a protection to the assessee and to prevent the Revenue from embarking on the recovery proceedings in respect of such amount. If such being the object of the provision, it is not possible to understand the word 'deduct' occurring i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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