Kaushal Kumar Singh Huf vs Principal Chief Commissioner Of Income … on 14 May, 2026

    0
    10
    ADVERTISEMENT

    Patna High Court

    Kaushal Kumar Singh Huf vs Principal Chief Commissioner Of Income … on 14 May, 2026

    Author: Rajeev Ranjan Prasad

    Bench: Rajeev Ranjan Prasad

             IN THE HIGH COURT OF JUDICATURE AT PATNA
                         Civil Writ Jurisdiction Case No.381 of 2026
         ======================================================
         Sharda Construction a partnership firm having its office at New Area,
         Maharajganj Road, Aurangabad, Bihar - 824102 through its authorised
         signatory Sanjay Kumar (Male, aged about 59 Years) son of Shri Mahabir
         Prasad resident of Near Zila School Chowk, Muhalla Gopiganj, Daltonganj,
         Palamu, Jharkhand - 822101.
                                                                     ... ... Petitioner
                                            Versus
    1.    Principal Chief Commissioner of Income Tax (TDS), Patna having its office
          at Vikas Bhawan, Patna -800001.
    2.   Dy. Commissioner of Income Tax, Circle -3, Gaya.
    3.   Punjab National Bank, Aurangabad.
    4.    National Project Construction Corporation Limited having its office at 15
          IAS Colony, Kidwaipuri, Patna
                                                                  ... ... Respondents
         ======================================================
                                             with
                        Civil Writ Jurisdiction Case No. 382 of 2026
         ======================================================
         Kaushal Kumar Singh HUF through its authorized signatory Sanjay Kumar
         (Male, aged about 59 Years) son of Shri Mahabir Prasad resident of Near Zila
         School Chowk, Muhalla- Gopiganj, Daltonganj, Palamu, Jharkhand- 822101
    
                                                                  .. ... Petitioner
                                          Versus
    1.   Principal Chief Commissioner of Income Tax (TDS), Patna having its office
         at Vikas Bhawan, Patna -800001.
    2.   Dy. Commissioner of Income Tax, Circle -3, Gaya
    3.   Punjab National Bank, M.G. Road, Aurangabad
    
                                                                  ... ... Respondents
         ======================================================
                                             with
                        Civil Writ Jurisdiction Case No. 429 of 2026
         ======================================================
         Kaushal Kumar Singh HUF through its authorized signatory Sanjay Kumar
         (Male, aged about 59 Years) Son of Shri Mahabir Prasad resident of Near Zila
         School Chowk, Muhalla- Gopiganj, Daltonganj, Palamu, Jharkhand- 822101
    
                                                                       ... ... Petitioner
                                          Versus
    1.   Principal Chief Commissioner of Income Tax (TDS) Patna.
    2.   Dy. Commissioner of Income Tax, Circle- 3, Gaya.
    3.   Manager, Punjab National Bank, M.G. Road, Aurangabad.
                                                                    ... ... Respondents
     Patna High Court CWJC No.381 of 2026 dt.14-05-2026
                                               2/26
    
    
    
    
           ======================================================
                                               with
                          Civil Writ Jurisdiction Case No. 435 of 2026
           ======================================================
           Debashree Construction India Pvt. Ltd. a company incorporated under
           Companies Act 1956, having its Office at New Area, Maharajganj Road,
           Aurangabad, Bihar- 824101 through its authorised signatory Sanjay Kumar
           (Male, aged about 59 years) son of Shri Mahabir Prasad, resident of Near Zila
           School Chowk, Muhalla- Gopiganj, Daltonganj, Palamu, Jharkhand- 822101.
    
                                                                     ... ... Petitioner
                                             Versus
      1.    Principal Chief Commissioner of Income Tax (TDS), Patna having its office
            at Vikas Bhawan, Patna- 800001.
      2.    Dy. Commissioner of Income Tax, Circle -3, Gaya.
      3.    Punjab National Bank, M.G. Road Branch, Aurangabad.
    
                                                                  ... ... Respondents
           ======================================================
                                              with
                         Civil Writ Jurisdiction Case No. 440 of 2026
           ======================================================
           Kaushal Kumar Singh Son of Late Ambika Prasad Singh Resident of Kunda,
           Aurangabad, Bihar, through its authorized signatory Sanjay Kumar, (Male,
           aged about 59 Years) Son of Shri Mahabir Prasad, resident of Near Zila
           School Chowk, Muhalla- Gopiganj, Daltonganj, Palamu, Jharkhand- 822101.
    
                                                                     ... ... Petitioner
                                             Versus
      1.    Principal Chief Commissioner of Income Tax (TDS), Patna having its office
            at Vikas Bhawan, Patna- 800001.
      2.    Assistant Commissioner of Income Tax, Circle- 1, Gaya.
      3.    Manager, Punjab National Bank, Aurangabad.
    
                                                                    ... ... Respondents
           ======================================================
                                                with
                           Civil Writ Jurisdiction Case No. 579 of 2026
           ======================================================
           Sharda Construction a partnership firm having its office at New Area,
           Maharajganj Road, Aurangabad, Bihar- 824102 through its authorised
           signatory Sanjay Kumar (Male, aged about 59 years) son of Shri Mahabir
           Prasad, resident of Near Zila School Chowk, Muhalla- Gopiganj, Daltonganj,
           Palamu, Jharkhand- 822101.
    
                                                                        ... ... Petitioner
                                               Versus
      1.    Principal Chief Commissioner of Income Tax (TDS), Income Tax
            Department,Patna having its office at Vikas Bhawan, Patna- 800001.
     Patna High Court CWJC No.381 of 2026 dt.14-05-2026
                                               3/26
    
    
    
    
      2.    Dy. Commissioner of Income Tax,Income Tax Department Circle-3, Gaya.
      3.    Manager,Punjab National Bank, M.G. Road Branch, Aurangabad.
      4.    Manager,Punjab National Bank, Old G T Road Branch, Aurangabad.
      5.    Executive Engineer, ELO, Ministry of Road Transport and Highway,
            Ranchi,Union of India.
    
                                                                     ... ... Respondents
           ======================================================
                                               with
                          Civil Writ Jurisdiction Case No. 626 of 2026
           ======================================================
           Kaushal Kumar Singh Son of Late Ambika Prasad Singh, Resident of Kunda,
           Aurangabad, Bihar through its authorized signatory Sanjay Kumar (Male,
           aged about 59 years) son of Shri Mahabir Prasad resident of Near Zila School
           Chowk, Muhalla- Gopiganj, Daltonganj, Palamu, Jharkhand- 822101.
    
                                                                    ... ... Petitioner
                                             Versus
      1.    Principal Chief Commissioner of Income Tax (TDS) Patna having its office
            at Vikas Bhawan, Patna-800001.
      2.    Assistant Commissioner of Income Tax, Circle-1, Gaya.
      3.    Punjab National Bank, Aurangabad.
    
                                                     ... ... Respondents
           ======================================================
           Appearance :
           (In Civil Writ Jurisdiction Case No. 381 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           (In Civil Writ Jurisdiction Case No. 382 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           (In Civil Writ Jurisdiction Case No. 429 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
     Patna High Court CWJC No.381 of 2026 dt.14-05-2026
                                               4/26
    
    
    
    
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           (In Civil Writ Jurisdiction Case No. 435 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           (In Civil Writ Jurisdiction Case No. 440 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           (In Civil Writ Jurisdiction Case No. 579 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           (In Civil Writ Jurisdiction Case No. 626 of 2026)
           For the Petitioner        :       Mr. D.V. Pathy, Sr. Advocate
                                             Mr. Sadashiv Tiwari, Advocate
                                             Mr. Hiresh Karan, Advocate
                                             Ms. Shivani Dewalla, Advocate
           For the Department        :       Ms. Archana Sinha @ Archana Shahi, Sr. SC
                                             Ms. Shilpi Keshri, Jr. SC
                                             Ms. Swarna Roy, Advocate
           For the Bank              :       Mr. Rajan Ghoshrave, Advocate
           ======================================================
           CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
                   and
                   HONOURABLE JUSTICE SMT. SONI SHRIVASTAVA
           ORAL JUDGMENT
           (Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
    
             Date : 14-05-2026
    
    
                        Heard learned senior counsel for the petitioner(s) and
    
           learned Senior Standing Counsel for the Department of Income
    
           Tax as well as learned Advocate for the Punjab National Bank.
     Patna High Court CWJC No.381 of 2026 dt.14-05-2026
                                               5/26
    
    
    
    
                        2. This batch of writ applications contains common
    
           questions to be considered by this Court. We are taking CWJC No.
    
           381 of 2026 (Sharda Construction versus Principal Chief
    
           Commissioner of Income Tax (TDS), Patna and Ors.) as the lead
    
           case.
    
                        3. The petitioner prays for the following reliefs:-
    
                                "i) For issue of a writ of mandamus or any other
                                appropriate writ (s) to the respondent no. 2 to
                                give credit to the tax deducted at source and
                                paid into the Government account statutorily
                                admissible in computing the tax liablity under
                                Section 199 of the Income Tax Act, 1961
                                (hereinafter called the Act) for the Assessment
                                Year 2013-14 taking credit of tax deducted at
                                source verifiable with reference to certificate of
                                deduction of tax at source and the updated Form
                                26AS displayed on the web portal of Income
                                Tax Department and modify the notice of
                                demand accordingly.
                                ii) For a direction to the respondent no. 3 and 4
                                to upload its return of TDS for the Assessment
                                Year 2013-14 containing details of payment of
                                tax deducted at source under section 194A of
                                the Act to enable display of such tax on the web
                                portal of the Income Tax Department in Form
                                26AS in order to enable credit thereof.
                                iii) for granting any other relief (s) to which the
                                petitioner is otherwise found entitled to."
     Patna High Court CWJC No.381 of 2026 dt.14-05-2026
                                               6/26
    
    
    
    
                        Brief Facts of the Case
    
                        4. It is the case of the petitioner that being a partnership
    
           firm, it is engaged in the business of execution of works contract.
    
           The petitioner filed its return for the assessment year 2013-14 and
    
           has made true and fair disclosure therein. The petitioner claimed
    
           deductions on account of Tax Deducted at Source (in short 'TDS').
    
           On the basis of the certificate of TDS in Form 16 A prescribed
    
           under Rule 31(1)(b) of the Income Tax Rules, 1962 (hereinafter
    
           referred to as the 'Rules of 1962'). A copy of the return of income
    
           tax along with computation of income tax details of the tax
    
           deducted at source has been annexed and marked as Annexure 'P/1
    
           Series'.
    
                        5. The grievance of the petitioner is that the TDS in
    
           some cases were not displayed at the web portal of the Income Tax
    
           Department in form 26AS prescribed under Section 203 AA and
    
           second proviso to Section 206C (5) of the Income Tax Act, 1961
    
           (hereinafter referred to as the 'IT Act or the Act') and Rule 31AB
    
           of the Rules of 1962. It is for this reason alone the respondents did
    
           not give credit to the TDS disclosed in Form 16A while passing
    
           the order of assessment. A copy of the order of assessment dated
    
           05.11.2015

    along with Form 26 AS is Annexure ‘P/2 Series’.
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    7/26

    6. In the writ application, there is an averment that the

    SPONSORED

    petitioner approached Punjab National Bank, Aurangabad

    (Respondent No. 3) and the National Project Construction

    Corporation Limited (Respondent No. 4) to give reasons as to why

    the amount of Tax Deducted at Source is not displayed on the Web

    Portal of the Income Tax Department. The Respondent Nos. 3 and

    4 issued a certificate certifying that the amount of TDS amounting

    to Rs.2,25,301/- was deposited in the Government account. A copy

    of the certificate issued by the Bank (Respondent No. 3) has been

    brought on record as Annexure ‘P/3 Series’.

    7. It is stated that the Assistant Commissioner of Income

    Tax, TDS Circle has initiated proceeding under Section 201(1A) of

    the Act against the Respondent Nos. 3 and 4 calling upon them as

    to why the TDS was not deposited in the Government account.

    The Respondents has been asked to show cause as to why a

    statutory interest and penalty be not imposed against them for the

    default.

    Submissions on behalf of the Petitioner(s)

    8. Learned senior counsel for the petitioner(s) submits

    that once the certificate of deduction of income tax at source has

    been issued by Respondent Nos. 3 and 4 in respect of depositing of

    tax in the Government account, it is incumbent upon Respondent
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    8/26

    No. 2 to credit the same in computing the total income. The

    grievance of the petitioner is that Respondent No. 2, while making

    the assessment, did not take notice of the certificate and other

    evidence as regards deduction of income tax at source. It is

    submitted that the petitioner has been denied a rightful claim of

    refund which was otherwise available to the petitioner as per

    computation of income and the assessment order already accepted

    by the Respondent No. 2 in the regular assessment.

    9. Referring to Section 194 of the Act, learned senior

    counsel submits that by virtue of this provision, the Bank is

    authorised to deduct income tax at source on the payments made to

    the petitioner on account of interest. The Bank has, in fact, updated

    the certificate of tax deducted at source on the web portal but the

    same has not been permitted to be claimed as a deduction by way

    of tax paid. The fact of deduction and payment of tax into the

    Government account stands proved as the Respondent has issued

    the certificate to this effect giving details of the deduction of

    income tax at source and deposit thereof. Thus, learned senior

    counsel submits that Section 194 of the Act provides for giving

    credit to the income tax deducted at source. This provision clearly

    provides that any deduction of income tax at source paid to the

    Central Government shall be treated as payment of tax on behalf
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    9/26

    of the person from whose income the deduction was made. In view

    of the statutory provisions, it is submitted that the Respondent No.

    2 is statutorily obliged to give credit to the tax deducted at source

    and deposit with the Government. Very emphatically, it has been

    submitted in the writ application that the evidence as regards

    deduction of income tax at source and deposit by Respondent Nos.

    3 and 4 in respect of tax deducted at source was filed before the

    Respondent No. 2. The same, however, has not been given credit

    to.

    10. In CWJC No. 382 of 2026 (Kaushal Kumar Singh

    HUF versus Principal Chief Commissioner of Income Tax (TDS),

    Patna and Ors.), the reliefs prayed are identical, however, it relates

    to the assessment year 2011-12. In this case also, the Bank

    (Respondent No. 3) has issued a certificate certifying that the

    amount of TDS amounting to Rs.1,74,762/- was deposited in the

    Government account.

    11. In CWJC No. 429 of 2026 (Kaushal Kumar Singh

    HUF versus Principal Chief Commissioner of Income Tax (TDS),

    Patna and Ors.), an identical relief has been prayed for in respect

    of the assessment year 2012-13. There is a statement in paragraph

    ’11’ of the writ application that Respondent No. 3 being a Bank

    deducted income tax at source of payments made to the petitioner
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    10/26

    in respect of interest and also deposited the same in the

    Government account. The said Respondent has also issued a

    certificate to that effect giving details of deductions and deposit

    thereof.

    12. In CWJC No. 435 of 2026 (Debashree Construction

    India Pvt. Ltd versus Principal Chief Commissioner of Income Tax

    (TDS), Patna and Ors.), the matter relates to the assessment year

    2012-13. In this case, Respondent No. 3 has deducted a sum of

    Rs.1,19,928/- and issued a certificate (Annexure ‘P/3’) saying that

    the amount of tax has been deposited in the Government account.

    13. In CWJC No. 440 of 2026 (Kaushal Kumar Singh

    versus Principal Chief Commissioner of Income Tax (TDS), Patna

    and Ors.), the petitioner has prayed for a writ in the nature of

    Mandamus directing Respondent No. 2 to give credit to the tax

    deducted at source and paid into the Government account by the

    Bank (Respondent No. 3). The matter pertains to the assessment

    year 2012-13. In this case also the Bank has issued certificate

    certifying that the amount of tax deducted at source amounting to

    Rs.1,49,819/- was deposited in the Government account.

    14. In CWJC No. 579 of 2026 (Sharda Construction

    versus Principal Chief Commissioner of Income Tax (TDS),

    Income Tax Department, Patna and Ors.), the petitioner seeks a
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    11/26

    direction to Respondent No. 2 to credit the tax deducted at source

    and paid into the Government account pertaining to the assessment

    year 2012-13. The Punjab National Bank (Respondent No. 3)

    issued a certificate certifying that the amount of TDS amounting to

    Rs.4,74,499/- was deposited in the Government account.

    15. In CWJC No. 626 of 2026 (Kaushal Kumar Singh

    versus Principal Chief Commissioner of Income Tax (TDS), Patna

    and Ors.), an identical prayer has been made pertaining to the

    assessment year 2011-12.

    16. In all these writ applications, one thing is common

    that the deductor Bank (Respondent No. 3) has issued certificate

    that the amount of TDS has been deposited in the Government

    account. A perusal of the certificate (Annexure ‘P/3’) would show

    that the certificate contains challan number, date of deposit and

    mode of deposit into the Central Government account. The

    certificates are issued way back in the year 2016.

    17. These writ applications were registered in this Court

    on 12.01.2026 with prior service of copies on the learned Senior

    Standing Counsel for the Department and learned counsel for the

    Punjab National Bank on 11.12.2025. As per the Patna High Court

    Rules and practice, two copies of the writ petitions have been

    served on learned Senior Standing Counsel for the Department and
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    12/26

    learned counsel for the Bank to facilitate them with an instruction

    on the concerned Department and the Bank as the case may be and

    submit a response but no response was filed. The writ applications

    were taken up for consideration on 21.04.2026. On the said date,

    this Court passed the following order:-

    “Heard Mr. D.V. Pathy, learned Senior counsel for the
    petitioner, Ms. Archana Sinha, learned Senior Standing
    counsel for the Income Tax Department, assisted by Ms.
    Shilpi, learned Advocate and Mr. Rajan Ghoshrave,
    learned Advocate appearing for Punjab National Bank.

    2. Mr. D.V. Pathy, learned Senior counsel for the
    petitioners submits that these writ applications have been
    preferred seeking a direction to the Department of Income
    Tax to give credit of the amount of tax deducted at source
    by the Punjab National Bank (Respondent No.3) in
    different assessment years. It is his submission that even
    though the Respondent No.3 has issued the certificate of
    deduction of tax at source in Form No.16A under Section
    203
    of the Income Tax Act, 1961, the credit of the said
    amount has not been given to the petitioners while
    passing of the order of assessment of their Income Tax
    Returns. As a result of this, the Department has raised
    demands with statutory interest under Sections 234A,
    234B, 234C and 234D of the Income Tax Act.

    3. Learned Senior counsel points out that despite
    confirmation as to genuineness of the Form- 6A certificate
    by the deductors, the Department of Income Tax is
    reluctant in proceeding with the same and for all these
    years the matter has remained pending for no fault on the
    part of the petitioners.

    4. Learned counsel for the Punjab National Bank has
    pointed out from the letter dated 10.02.2016 (Annexure-
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    13/26

    P/4) that in the enquiry relating to verification of TDS
    claim in case of M/s Sharda Construction, New Area,
    Aurangabad, the Punjab National Bank (hereinafter
    referred to as ‘P.N.B.’) has confirmed that TDS amount of
    Rs.2,08,540-/ has been deducted from interest on TDR
    and deposited at Dhamitola Branch, Gaya. The Challan
    number and the date of deposit of the amount to the
    Central Government account has been shown in
    Annexure-P/4 which is part of Annexure-P/3 series. It is
    pointed out that 10 years have gone, thereafter, but the
    Department has not given credit of the amount to the
    petitioner.

    5. In the case of Kaushal Kumar Singh HUF also, the
    similar situation exits, learned counsel for the Punjab
    National Bank has submitted that the letter of the P.N.B.
    is not annexed with the writ application, but the fact
    remains that the P.N.B. has confirmed to the Income Tax
    Department about the deduction and the deposit of the
    same in the Government account.

    6. Learned Senior counsel for the petitioners and learned
    counsel for the P.N.B. have jointly submitted that in all
    other cases, the facts are identical. The Bank has already
    confirmed the deductions and deposit of the same.

    7. Faced with the aforesaid situation, Ms. Archana Sinha,
    learned Senior Standing counsel for the Income Tax
    Department finds it difficult to explain as to why the
    Department has not given credit of this amount for last ten
    years and in ultimate analysis if the Department is found
    liable to pay the interest for all these years then who will
    be liable for the same.

    8. This Court has been persuaded to grant an adjournment
    to take up this matter with the Department to resolve the
    matter and come out with an appropriate affidavit within a
    reasonable period.

    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    14/26

    9. Let these matters be listed on 12.05.2026 under the
    same heading, maintaining their positions.

    10. It is expected that the Department shall resolve the
    matter and file an appropriate affidavit within the said
    period.

    11. List accordingly.”

    18. Despite the opportunity granted to the Department to

    resolve the matter and come out with an appropriate affidavit,

    nothing was done. The writ applications came to be taken up again

    on 13.05.2026. This Court passed the following order on that day:-

    “By way of last indulgence, the matter is being passed over
    for the day to enable the respondents to file their counter
    affidavits, if so desire. No time shall be granted tomorrow.

    2. List these matters tomorrow (14.05.2026).”

    Submissions on behalf of Income Tax Department

    19. Learned Senior Standing Counsel for the

    Department agrees that in all these cases the facts are not in

    dispute. She has, however, submitted that the Department can give

    credit of the tax deducted at source by the Bank only when it is

    found to have been deposited with the Central Government. In this

    connection, she has relied on Section 199 of the IT Act read with

    Rule 37 BA. It is submitted that according to this Rule, the credit

    for tax deducted at source and paid to the Central Government in

    accordance with the provisions of Chapter XVII shall be given to

    the person to whom payment has been made or credit has been
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    15/26

    given on the basis of information relating to deduction of tax

    furnished by the deductor to the Income Tax Authority or the

    person authorised by such authority. It is submitted that under

    Sub-Rule (4) of Rule 37 BA, credit for tax deducted at source and

    paid to the account of the Central Government shall be granted on

    the basis – (i) the information relating to deduction of tax furnished

    by the deductor to the Income Tax Authority or the person

    authorised by such authority; and (ii) the information in the return

    of income in respect of the claim for the credit, subject to

    verification in accordance with the risk management strategy

    formulated by the Board from time to time.

    20. It is submitted that Section 200 of the IT Act

    imposes a duty upon the person deducting any sum under the Act

    to pay the same in the account of the Central Government within

    the prescribed period. Section 200A provides for processing of

    statements of tax deducted at source and Section 201 of the IT Act

    provides for the consequences of failure to deduct or pay.

    21. Without controverting the specific statements of the

    petitioners and the certificates issued by Respondent No. 3, by

    filing a counter affidavit sworn by a responsible officer of the

    Department, it is submitted that in this case, the deductor had

    neither filed their returns nor deposited the deducted TDS amount
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    16/26

    in the Central Government account, hence, deducted amount was

    not visible at the Department Portal. It is further submitted that

    there is another difficulty on the part of the Department that before

    refunding the amount to the petitioner, they have to verify from the

    portal that whether any demand for any previous year is pending

    or not against the petitioner. If any demand is pending against the

    petitioner for previous years then the same will be adjusted from

    the amount which is to be refunded by the Department to the

    petitioner. These statements have been made by way of

    submissions under signature of the Senior Standing Counsel,

    Income Tax. The fact remains that the Department of Income Tax

    has not filed any affidavit in opposition despite time granted to

    them. The fact that the amount has been deposited by the Bank in

    the Government account has not been denied.

    22. We are of the opinion that the mere submission

    under signature of the learned Advocate that the deductors have

    neither filed their returns nor deposited the TDS amount in the

    Central Government account do not inspire confidence of this

    Court.

    Submissions on behalf of the Bank

    23. Mr. Rajan Ghoshrave, learned counsel for the Bank

    (Respondent No. 3) has categorically submitted before this Court
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    17/26

    that Respondent No. 3 has issued the prescribed Form 16A

    showing the tax deducted at source with all responsibilities and on

    a bare perusal of the certificates (Annexure ‘P/3 Series’), it would

    appear that these certificates duly contained the date of challan

    number of deposit of tax into Central Government account. The

    name of the Bank and branch where the tax has been deposited

    with the BSR Code are also mentioned in the Form 16A.

    Consideration

    24. We have found that even as learned Senior Standing

    Counsel for the Department has in her written submissions made a

    statement that the deductors have neither filed their returns nor

    deposited the deducted amount into Central Government account,

    in course of her submissions at the Bar, she does not deny the facts

    stated in the writ applications. Such submissions in the written

    form by learned Senior Standing Counsel is only for the sake of

    submissions, therefore, do not carry any weight and are liable to be

    rejected.

    25. In the given facts of these writ applications, we have

    considered the statutory provisions which have a bearing upon this

    case. Section 198 under the Heading “Tax Deducted is Income

    Received” reads as under:-

    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    18/26

    “198. Tax deducted is income received. – All sums
    deducted in accordance with 5[the foregoing provisions of
    this Chapter] 6[and income-tax paid outside India, by way of
    deduction, in respect of which an assessee is allowed a credit
    against the tax payable under this Act], shall, for the purpose
    of computing the income of an assessee, be deemed to be
    income received :

    7

    [Provided that the sum being the tax paid, under sub-
    section (1A) of section 192 for the purpose of computing the
    income of an assessee, shall not be deemed to be income
    received:]
    8
    [Provided further that the sum deducted in accordance
    with the provisions of section 194N for the purpose of
    computing the income of an assessee, shall not be deemed to
    be income received.]”

    26. Section 199 deals with the provisions relating to the

    credit for tax deducted. We reproduce Section 199 of the IT Act

    hereunder:-

    “9[199. Credit for tax deducted.–(1) Any deduction made
    in accordance with the foregoing provisions of this Chapter
    and paid to the Central Government shall be treated as a
    payment of tax on behalf of the person from whose income
    the deduction was made, or of the owner of the security, or
    of the depositor or of the owner of property or of the unit-
    holder, or of the shareholder, as the case may be.
    (2) Any sum referred to in sub- Section (1A) of section 192
    and paid to the Central Government shall be treated as the
    tax paid on behalf of the person in respect of whose income
    such payment of tax has been made.

    5. Substituted by Act 23 of 2004, S. 40, for the portion beginning with the words and figures
    “the provisions of sections 192” and ending with the word, figures and letter “section 196-D

    (w.e.f. 1-10-2004).

    6. Inserted by Act 15 of 2024, S. 66 (w.e.f. 1-4-2025).

    7. Inserted by Act 20 of 2002, S. 86 (w.e.f. 1-6-2002).

    8. Inserted by Act 23 of 2019, S. 49 (w.e.f. 1-9-2019).

    9. Inserted by Act 18 of 2008, S. 45 (w.e.f. 1-4-2008).
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    19/26

    (3) The Board may, for the purposes of giving credit in
    respect of tax deducted or tax paid in terms of the
    provisions of this Chapter, make such rules as may be
    necessary, including the rules for the purposes of giving
    credit to a person other than those referred to in sub-
    section (1) and sub-section (2) and also the assessment
    year for which such credit may be given.]”

    27. Section 200 of the IT Act casts duty upon the person

    deducting tax to pay the deducted amount to the credit of the

    Central Government within the prescribed period. Section 200A

    lays down the procedure for processing of the statements of tax

    deducted at source, made by a person deducting the amount (in

    short “the deductor”) under Section 200 of the IT Act. Section 201

    lays down the consequences of failure to deduct or pay. We

    reproduce Section 201 of the IT Act hereunder:-

    “201. Consequences of failure to deduct or pay.–

    1

    [(1) Where any person, including the principal
    officer of a company,–

    (a) who is required to deduct any sum in accordance
    with the provisions of this Act; or

    (b) referred to in sub- Section (1A) of section 192,
    being an employer, does not deduct, or does not pay,
    or after so deducting fails to pay, the whole or any
    part of the tax, as required by or under this Act, then,
    such person, shall, without prejudice to any other
    consequences which he may incur, be deemed to be
    an assessee in default in respect of such tax:

    1. Substituted by Act 18 of 2008, S. 46, for sub-S. (1) (w.r.e.f. 1-6-2002).

    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    20/26

    2
    [Provided that any person, including the principal
    officer of a company, who fails to deduct the whole
    or any part of the tax in accordance with the
    provisions of this Chapter on the sum paid to a
    3
    [payee] or on the sum credited to the account of a
    3
    [payee] shall not be deemed to be an assessee in
    default in respect of such tax if such 3[payee]–

    (i) has furnished his return of income under section
    139
    ;

    (ii) has taken into account such sum for computing
    income in such return of income; and

    (iii) has paid the tax due on the income declared by
    him in such return of income, and the person
    furnishes a certificate to this effect from an
    accountant in such form as may be prescribed:]
    4
    [Provided further that] no penalty shall be charged
    under section 221 from such person, unless the
    Assessing Officer is satisfied that such person,
    without good and sufficient reasons, has failed to
    deduct and pay such tax.]
    5
    [(1-A) Without prejudice to the provisions of sub-
    section (1), if any such person, principal officer or
    company as is referred to in that sub-section does not
    deduct the whole or any part of the tax or after
    deducting fails to pay the tax as required by or under
    this Act, he or it shall be liable to pay simple interest,

    2. Inserted by Act 23 of 2012, S. 79 (w.e.f. 1-7-2012).

    3. Substituted by Act 23 of 2019, S. 50(a), for “resident” (w.e.f. 1-9-2019).

    4. Substituted by Act 23 of 2012, S. 79, for “Provided that” (w.e.f. 1-7-2012).

    5. Substituted by Act 14 of 2010, S. 42, for sub-S. (1-A) (w.e.f. 1-7-2010).
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    21/26

    (i) at one per cent for every month or part of a month
    on the amount of such tax from the date on which
    such tax was deductible to the date on which such
    tax is deducted; and

    (ii) at one and one-half per cent for every month or
    part of a month on the amount of such tax from the
    date on which such tax was deducted to the date on
    which such tax is actually paid, and such interest
    shall be paid before furnishing the statement in
    accordance with the provisions of subsection (3) of
    section 200:]
    2
    [Provided that in case any person, including the
    principal officer of a company fails to deduct the
    whole or any part of the tax in accordance with the
    provisions of this Chapter on the sum paid to a
    1
    [payee] or on the sum credited to the account of a
    1
    [payee] but is not deemed to be an assessee in
    default under the first proviso to sub-section (1), the
    interest under clause (i) shall be payable from the
    date on which such tax was deductible to the date of
    furnishing of return of income by such 1[payee]:]
    2
    [Provided further that where an order is made by the
    Assessing Officer for the default under sub-section
    (1), the interest shall be paid by the person in
    accordance with such order.]
    (2) Where the tax has not been paid as aforesaid after
    it is deducted, 3[the amount of the tax together with
    the amount of simple interest thereon referred to in
    sub-section (1A) shall be a charge upon all the assets
    of the person, or the company, as the case may be,
    referred to in sub-section (1).]

    1. Substituted by Act 23 of 2019, S. 50(b), for “resident” (w.e.f. 1-9-2019).

    2. Inserted by Act 23 of 2012, S. 79 (w.e.f. 1-7-2012).
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    22/26

    4 5
    [ [(3) No order shall be made under sub-section (1)
    deeming a person to be an assessee in default for failure
    to deduct the whole or any part of the tax from 6[any
    person, at any time after the expiry of six years] from the
    end of the financial year in which payment is made or
    credit is given 7[or two years from the end of the financial
    year in which the correction statement is delivered
    6
    [under the first proviso] to sub-section (3) of section
    200
    , whichever is later].]
    (4) The provisions of sub-clause (ii) of sub-section (3) of
    section 153 and of Explanation 1 to section 153 shall, so
    far as may, apply to the time limit prescribed in sub-
    section (3).]
    8
    [Explanation.–For the purposes of this section, the
    expression “accountant” shall have the meaning assigned
    to it in the Explanation to sub-section (2) of section

    288.]”

    28. Section 203 of the IT Act is under heading “Certificate

    for Tax Deducted”. Under Sub-Section (1) of Section 203 every

    person deducting tax has a duty to credit or payment of the same

    within the prescribed period and furnish to the person to whose

    account such credit is given or to whom such payment is made or the

    cheque or warrant is issued, a certificate to the effect that tax has

    been deducted, specifying the amount so deducted, the rate at which

    tax has been deducted and such other particulars as may be

    prescribed.

    4. Inserted by Act 33 of 2009, S. 66 (w.e.f. 1-4-2010).

    5. Substituted by Act 25 of 2014, S. 62, for sub-S. (3) (w.e.f. 1-10-2014).

    6. Substituted by Act 15 of 2024, S. 69, for certain words (w.e.f. 1-4-2025).

    7. Inserted by Act 23 of 2019, S. 50(c) (w.e.f. 1-9-2019).

    8. Inserted by Act 23 of 2012, S. 79 (w.e.f. 1-7-2012).
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    23/26

    29. Section 203A is under heading “Tax Deduction and

    Collection Account Number”. Section 203A is reproduced hereunder for

    a ready reference:-

    “2[203A. Tax deduction and collection account number.–(1)
    Every person, deducting tax or collecting tax in accordance
    with the provisions of this Chapter, who has not been allotted a
    tax deduction account number or, as the case may be, a tax
    collection account number, shall, within such time as may be
    prescribed, apply to the Assessing Officer for the allotment of a
    “tax deduction and collection account number”.

    (2) Where a “tax deduction account number” or, as the case
    may be, a “tax collection account number” or a “tax deduction
    and collection account number” has been allotted to a person,
    such person shall quote such number –

    (a) in all challans for the payment of any sum in accordance
    with the provisions of section 200 or sub-section (3) of section
    206C
    ;

    (b) in all certificates furnished under section 203 or sub-section
    (5) of section 206-C;

    3

    [(ba) in all the 4[***] statements prepared and delivered or
    caused to be delivered in accordance with the provisions of
    sub-section (3) of section 200 or sub-section (3) of section 206-
    C;]

    (c) in all the returns, delivered in accordance with the
    provisions of section 206 or sub-section (5A) or sub-section
    (5B) of section 206C to any income-tax authority; and

    (d) in all other documents pertaining to such transactions as
    may be prescribed in the interests of revenue.]
    5
    [(3) The provisions of this section shall not apply to such
    person, as may be notified by the Central Government in this
    behalf.]”

    2. Substituted by Act 23 of 2004, S. 45, for S. 203-A (w.e.f. 1-10-2004).

    3. Inserted by Act 21 of 2006, S. 44 (w.e.f. 1-6-2006).

    4. The word “quarterly” omitted by Act 33 of 2009, S. 67 (w.e.f. 1-10-2009).

    5. Inserted by Act 20 of 2015, S. 53 (w.e.f. 1-6-2015).
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    24/26

    30. Section 205 creates a bar against direct demand on

    assessee. It reads as under:-

    “205. Bar against direct demand on assessee.–
    Where tax is deductible at the source under 2[the
    foregoing provisions of this Chapter], the assessee
    shall not be called upon to pay the tax himself to the
    extent to which tax has been deducted from that
    income.”

    31. Section 206 casts an obligation upon the person

    deducting the tax to furnish prescribed returns. From the

    Scheme of the IT Act, there is no iota of doubt that it is the

    duty of the deductor to furnish a statement of tax deducted at

    source and failure to deduct or to deposit the deducted amount

    would make the deductor an assessee in default in respect of

    such tax. The bar under Section 205 is attracted if the

    deductions have been made.

    32. In these cases, there is no denial of the

    statements made in the writ applications that the Respondent

    No. 2 has issued show cause notices to the Deductor.

    33. The certificates issued by the Respondent-Bank

    (Respondent No. 3) contain all relevant informations as

    required in law. It was the duty of the Department to conduct

    2. Substituted by Act 23 of 2004, S. 48, for certain words (w.e.f. 1-10-2004).
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    25/26

    verification and only in case those informations furnished in

    the certificate and Form 16A would have been wrong, the

    Department could have denied giving credit of the amount to

    the deductee. That has not been done in these cases despite

    lapse of several years. The Department has not denied

    correctness of the informations furnished in the certificates

    and Form 16A.

    34. In such circumstances, this Court directs the

    Department of Income Tax and its Authorities to verify the

    information furnished in Form 16A and the certificates within

    a period of one month from the date of receipt/

    communication of a copy of the judgment. If the genuineness

    of the certificates and the information furnished in Form 16A,

    copies of which are enclosed with the writ applications, are

    not in question on the face of the stand taken by the

    Respondent No. 3, the Department cannot keep on sitting over

    the matter and deny giving credit of the TDS amount to the

    petitioner(s). If nothing adverse is found in the genuineness of

    the certificates and Form 16A, within the stipulated period of

    one month, the Department and its authorities are directed to

    give full credit of the TDS amount and issue refunds, if any,
    Patna High Court CWJC No.381 of 2026 dt.14-05-2026
    26/26

    after adjustments against any previous outstanding tax against

    the petitioner(s) within one month thereafter. The refund

    amount shall carry statutory interest with effect from the date

    the refund became due on passing of the regular assessment

    order.

    35. These writ applications stand disposed of

    accordingly.

    (Rajeev Ranjan Prasad, J)

    ( Soni Shrivastava, J)

    SUSHMA2/-

    AFR/NAFR                AFR
    CAV DATE
    Uploading Date          22.05.2026
    Transmission Date
     



    Source link

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here