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Gujarat High Court: In a writ petition seeking quashing of intimations sent by the Income Tax Authorities regarding mismatch of TDS, the Division Bench of *A.S. Supehia, J and Pranav Trivedi, J, held that the petitioner pilot was entitled to receive TDS credit despite the TDS not deposited by employer, Kingfisher Airlines, failing to remit the deducted tax to the Central Government.
Background
The petitioner is a pilot by profession and an ex-employee of Kingfisher Airlines. During the relevant assessment years (‘AY’), 2009-2010, 2010-2011, 2011-2012 and 2012-2013, Kingfisher had deducted Tax Deducted at Source (TDS) but had failed to deposit it in the Central Government Account. Since the tax had not been deposited by Kingfisher, the demands were raised in the petitioner’s case and the respondent had informed the petitioner that no credit could be given due to mismatch of TDS.
On 29-11-2013, the petitioner had filed an application before the respondent requesting him to grant the refund and delete the outstanding amount. Subsequently, on 3-2-2017, the petitioner had received intimation under Section 245 of the Income Tax Act, 1961 (‘Act’) and had been informed that the refund would be adjusted against the outstanding amount.
Analysis, Law and Decision
The Court placed reliance on the cases of Devarsh Pravinbhai Patel v. CIT, SCA No. 12965 of 2018 and Kartik Vijaysinh Sonavane v. CIT, (2022) 440 ITR 11. Both the cases had been filed by pilots of Kingfisher Airlines claiming similar reliefs.
The Courts in the aforementioned cases had held that the tax department could not be precluded from denying the benefit of tax deducted at source to the assessee-deductee for the relevant financial years. The Court in the case of CIT v. Om Praksh Gattani, (2000) 242 ITR 638, had also held that Section 201 of the Act granted a protection to the assessee where tax liability as standing against him is not yet discharged and credit for the amount deducted cannot be given in terms of Section 199 of the Act. Furthermore, Section 205 of the Act also provides that where tax is deductible at source, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income. In case where the amount has been deducted but not paid to the Central Government that eventuality is taken care of by Section 201 of the Act.
Following the law laid down in the aforementioned cases, the Court held that the credit of the tax shall be given to the petitioner and if in the interregnum any recovery or adjustment is made by the respondent, the petitioner shall be entitled to the refund of the same, with the statutory interest.
[Arpit Pravinbhai Shah v. Assistant Commissioner of Income Tax, 2025 SCC OnLine Guj 5801, decided on 23-12-2025]
*Judgment Authored by: Justice A.S. Supehia
Advocates who appeared in this case:
For the Petitioner: Darshan R. Patel, Advocate
For the Respondent: Dev D Patel, Advocate