Employer paid salary to assessee after deduction of tax at source but did not deposit same with department. Assessing Officer did not allow credit of tax deducted at source and raised demand against assessee towards tax and interest. The Revenue has adjusted the demand against the refund due to the assessee.  On writ the court held that, if employer after deduction failed to deposit the tax deducted at source, the assessee cannot be penalised.  Section 199 could not operate as impediment to grant relief to assessee. Accordingly the demand is set aside. The Revenue is directed to refund the amount recovered. The Court also observed that it is the duty of the employer acting as a collecting agent to pay deducted the tax deducted at source to Central Government. (AY. 2009-10, 2011-12, 2012-13)