Order of High Court of Gujarat – 24th September, 2018

High Court of Gujarat in case of Devarsh Pravinbhai Patel v/s Asst Commissioner Of Income Tax has held that

TDS credit has to be provided by Income-tax authorities to the deductee even if TDS is not deposited by the deductor.

If employer deducted TDS on salary payments made to the assessee and did not deposit that TDS amount with the credit of Central Government, the department could not refuse the advantage of TDS by the employer of the assessee and credit of such tax will be given to the assessee for the respective years.

Assessee was an individual who was employed as a pilot. During this period, the employer deducted TDS on salary payments made to the assessee. The employer did not deposit such tax with the credit of Central Government. In this issue, the question was that can the department recover such amount from the assessee or whether the assessee was right in asserting that he had suffered the deduction of tax, the fact that the assesee did not deposit such tax with the credit of Central Government could not allow the Income Tax Department to recover such amount from assessee.

High Court of Gujarat held that, under the circumstances, by allowing the petitions the department could not refuse the advantage of TDS by the employer of the petitioner during the relevant financial years. The credit of such tax will be given to the assessee for the respective years. If there has been any adjustment out of the refunds of the later years, the same will be returned to the petitioner with statutory interest attracted.