PRIYANK AGRAWAL S/O LT. SHRI GOPAL AGRAWAL vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, Priyank Agrawal, filed a writ petition challenging tax demands for Assessment Years (AY) 2011-12 and 2012-13, arising from the non-deposit of Tax Deducted at Source (TDS) by his former employer, Kingfisher Airlines. The demands amounted to Rs.16,94,330/- for AY 2011-12 and Rs.18,33,150/- for AY 2012-13. The petitioner was also served a notice under Section 245 of the Income Tax Act, 1961, proposing to adjust refunds against these outstanding demands. The petitioner's grievance was considered and the case was closed on April 24, 2024.

Held

The High Court held that for the demand created against the petitioner for non-deposit of TDS by the employer, the petitioner has a statutory remedy of appeal. The Court noted that there were no pleadings indicating that the demands for AY 2011-12 and 2012-13 had been challenged or that such proceedings were pending. Regarding the notice under Section 245 of the Act, the Court stated that the petitioner must respond to the notice, and the respondent authority will proceed in accordance with law after considering the reply. If the petitioner is aggrieved by the subsequent order, they will have a statutory remedy. Consequently, the Court found no reason to interfere in its writ jurisdiction. The writ petition was disposed of with liberty to the petitioner to avail remedies in accordance with law against the demands and to file a response to the Section 245 notice within two weeks.

Key Issues

1. Whether the demand for TDS, where TDS was deducted by the employer but not deposited, amounts to double taxation and should not be adjusted against the petitioner's refund under Section 245 of the Income Tax Act, 1961? (Question of law and fact) Assessee's Contentions: - The employer had deducted the TDS, and the petitioner is entitled to credit for this deducted amount. - The demand for TDS constitutes double taxation. - No adjustment under Section 245 of the Act should be made. Revenue's Contentions: - The challenge in the petition is to a show-cause notice.