Date of Order: July 21, 2023
The case revolves around an appeal by Jignesh Panchal against the decision of the Deputy Commissioner of Income Tax (DCIT), Circle-1, Noida. The appeal challenges the rejection of a TDS credit claim amounting to Rs. 24,75,000 for the assessment year 2011-12, deducted by his employer but allegedly not deposited with the government.
Panchal argued that the Income Tax Appellate Tribunal (ITAT) should allow his TDS claim, highlighting that the employer had deducted the TDS but failed to deposit it with the Central Government, an issue that led to the rejection of his claim by the lower tax authorities.
The ITAT considered the condonation of delay in filing the appeal, noting that part of the delay was within the extended period granted by the Supreme Court due to the COVID-19 pandemic. Further, the ITAT found that Panchal had acted diligently by filing the appeal shortly after obtaining the necessary documents from the income tax portal.
The tribunal ruled in favor of Panchal, directing the AO to credit the TDS amount. It referenced the Delhi High Court decision in the case of Sanjay Sudan vs. ACIT, which set a precedent that the revenue cannot adjust taxes not deposited by the deductor against the refund due to the employee.
This decision underscores the protection of employees from the failures of employers to fulfill their tax deposit obligations and clarifies the responsibilities of tax authorities in handling such cases. It also highlights the need for taxpayers to vigilantly follow up on their TDS certificates and ensure timely resolution of disputes.
Dispute Analysis: Jignesh Panchal vs. DCIT on TDS Claims for AY 2011-12
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