Judicial Scrutiny of Tax Deducted at Source (TDS) Non-Deposit: Protecting the Rights of Taxpayers Against Employers' Failure to Deposit TDS

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..... ves a writ petition under Articles 226 and 227 of the Constitution of India , addresses several intricate legal issues regarding income tax demands and adjustments. The petitioner sought relief against tax demands and interest reflected on the income tax portal for certain Assessment Years (AYs), as well as the release of refund amounts which were allegedly adjusted against these demands. The .....

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..... lier decision in the case of Sanjay Sudan vs Assistant Commissioner of Income Tax , emphasized that the assessees cannot be held liable for the tax already deducted by their employer. This interpretation upholds the legislative intent behind Section 205 , providing a safeguard to taxpayers against demands for tax already deducted. 2. Role of Employers as Tax Collecting Agents Legal .....

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..... stments are in contravention of the principles laid down in Section 205 . It was held that indirect recovery of tax, which has been deducted but not deposited, is not permissible under the law. 4. Coercive Measures Against Taxpayers Legislative Intent : The court examined the legislative intent behind the relevant provisions, particularly focusing on the prohibition of coercive meas .....

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