The employer deducted the tax for a whole year, but it was not deposited with the Government from May 2018 onwards. Even the salary was not paid to the assessee from October 2018. However, the assessee continued to remain under employment for the entire year. Owing to the stipulation of s. 15, the assessee offered to tax all the salary income (whether paid or not) while filing an Income Tax Return. The CPC did not allow the credit of tax to the extent deducted but not paid. The Tribunal held that credit for the amount of tax deducted at source is not dependent upon its subsequent deposit by the deductor. Once there is a tax deduction at source, the benefit of such tax deduction has to be allowed in the hands of deductee u/s 143(1) of the Act irrespective of its subsequent deposit or non-deposit by the deductor.(AY. 2019-20)
Mukesh Padamchand Sogani v. ACIT(2023) 200 ITD 104 (Pune)(Trib)
S. 143(1)(a) : Assessment-Intimation Adjustments -Deduction of tax at source-Credit for tax deducted-Employer deducting the tax and not depositing-Credit cannot be denied-Section 143(1)(c) does not lay down the condition that tax deducted at source has to be paid to the Government for the credit to be allowed as opposed to the case of payment of advance tax. [S. 143(1)(c), 199, 209(1)(d),234B]