|Assessee was a pilot by profession and employee of Kingfisher Airlines. The Kingfisher Airlines had tax at source (TDS) from the salaried income of the assessee for the Assessment Year 2009-10 and 2011-12. However, the said TDS amount had not been deposited by the Airlines in the Central Government Account.|
Accordingly, the TDS credit as claimed by the assessee was not given by the Assessing Officer (AO). AO raised demand along with interest and also initiated recovery proceedings. The assessee filed writ petition before the Gujarat High Court against recovery notices.
|The Gujarat High Court has relied upon the ruling delivered by the Gauhati High Court in the case of Om Prakash Gattani  117 Taxman 549 (Gauhati). The Court held that a perusal of Section 205 clarifies the position where it 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.|
Further, if the amount has been deducted but not paid to the Central Government, that eventuality is taken care of by Section 201 of the Income-tax Act. AO could not show that under the law, it may be permissible to proceed against the assessee even after deduction of the tax at source.
|The Gujarat High Court allowed the petition of the assessee and held that no separate reasoning was desirable. The department is precluded from denying the benefit of the tax deducted at source by the employer during the relevant financial years to the assessee.|
The credit of tax shall be given to the assessee, and if in the interregnum any recovery or adjustment is made by the AO, the assessee shall be entitled to the refund of the same along with the statutory interest.