Sarath V.S. & Ors. v. Commissioner of Income Tax & Ors. (connected writ appeals)

[Cites 8, Cited by 0] Kerala High Court Zalma Jalal vs The Commissioner Of Income Tax,Aayakar ... on 5 January, 2026 Author: A.K.Jayasankaran Nambiar Bench: A.K.Jayasankaran Nambiar WA NO. 2142 OF 2025 1 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE JOBIN SEBASTIAN MONDAY, THE 5TH DAY OF JANUARY 2026 / 15TH POUSHA, 1947 WA NO. 2142 OF 2025 AGAINST THE JUDGMENT DATED 03.04.2025 IN WP(C) NO.39376 OF 2024 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: SARATH V.S., AGED 37 YEARS MURUKKARATHALA PUTHEN VEEDU, 10-58, PADANTHALUMOODU, NEAR SREE DHARMA SHASTHA TEMPLE, VILAVANCODE, KANYAKUMARI, TAMIL NADU, PIN - 629163 BY ADV SHRI.ADARSH SIVADASAN RESPONDENTS/RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, PIN - 695003 2 ATTINAD SOFTWARE PVT. LTD., REPRESENTED BY ITS DIRECTOR, UNIT 355, NILA BUILDING, TECHNOPARK, THIRUVANANTHAPURAM, PIN - 695581 BY ADVS. SRI.NAVANEETH.N.NATH SRI.P.G.JAYASHANKAR, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.01.2026, ALONG WITH WA.NOs.2146/2025, 2147/2025 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA NO. 2142 OF 2025 2 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE JOBIN SEBASTIAN MONDAY, THE 5TH DAY OF JANUARY 2026 / 15TH POUSHA, 1947 WA NO. 2146 OF 2025 AGAINST THE JUDGMENT DATED 03.04.2025 IN WP(C) NO.26520 OF 2024 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: VIVEKANAND V.V., AGED 36 YEARS VELLAMPARAMBIL HOUSE, PERUVAMKULANGARA, OLLUR P.O., THRISSUR, PIN - 680306 BY ADV SHRI.ADARSH SIVADASAN RESPONDENTS/RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, PIN - 695003 2 ATTINAD SOFTWARE PVT. LTD., REPRESENTED BY ITS DIRECTOR, UNIT 355, NILA BUILDING, TECHNOPARK, THIRUVANANTHAPURAM, PIN - 695581 BY ADVS. SRI.NAVANEETH.N.NATH SRI.P.G.JAYASHANKAR, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.01.2026, ALONG WITH WA.No.2142/2025 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA NO. 2142 OF 2025 3 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE JOBIN SEBASTIAN MONDAY, THE 5TH DAY OF JANUARY 2026 / 15TH POUSHA, 1947 WA NO. 2147 OF 2025 AGAINST THE JUDGMENT DATED 03.04.2025 IN WP(C) NO.26492 OF 2024 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: MRIDUL RAJ KUNNON,AT KUNNON HOUSE, AGED 36 YEARS THALIYIL, KANNUR UNIVERSITY CAMPUS P.O., KANNUR, KERALA, PIN - 670567 BY ADV SHRI.ADARSH SIVADASAN RESPONDENTS/RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, PIN - 695003 2 ATTINAD SOFTWARE PVT LTD., REPRESENTED BY ITS DIRECTOR, SITUATED AT UNIT 355, NILA BUILDING, TECHNOPARK, THIRUVANANTHAPURAM, PIN - 695581 BY ADVS. SRI.NAVANEETH.N.NATH SRI.P.G.JAYASHANKAR, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.01.2026, ALONG WITH WA.No.2142/2025 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA NO. 2142 OF 2025 4 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE JOBIN SEBASTIAN MONDAY, THE 5TH DAY OF JANUARY 2026 / 15TH POUSHA, 1947 WA NO. 2148 OF 2025 AGAINST THE JUDGMENT DATED 03.04.2025 IN WP(C) NO.26493 OF 2024 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: ZALMA JALAL, AGED 35 YEARS T.C. 4/1465 (C1), CLIFF VALLEY, YMR JUNCTION, KOWDIAR P.O., THIRUVANANTHAPURAM, PIN - 695003 BY ADV SHRI.ADARSH SIVADASAN RESPONDENTS/RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, PIN - 695003 2 ATTINAD SOFTWARE PVT. LTD., REPRESENTED BY ITS DIRECTOR, UNIT 355, NILA BUILDING, TECHNOPARK, THIRUVANANTHAPURAM, PIN - 695581 BY ADVS. SRI.NAVANEETH.N.NATH SRI.P.G.JAYASHANKAR THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.01.2026, ALONG WITH WA.2142/2025 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA NO. 2142 OF 2025 5 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE JOBIN SEBASTIAN MONDAY, THE 5TH DAY OF JANUARY 2026 / 15TH POUSHA, 1947 WA NO. 2149 OF 2025 AGAINST THE JUDGMENT DATED 03.04.2025 IN WP(C) NO.39367 OF 2024 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: LITHU T.V., AGED 35 YEARS THIRUVATHIRA, T.C53/415, PONNUMANGALAM, NEMOM P.O., THIRUVANANTHAPURAM, PIN - 695020 BY ADV SHRI.ADARSH SIVADASAN RESPONDENTS/RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, PIN - 695003 2 ATTINAD SOFTWARES PVT. LTD., REPRESENTED BY ITS DIRECTOR, UNIT 355, NILA BUILDING, TECHNOPARK, THIRUVANANTHAPURAM, PIN - 695581 BY ADVS. SRI.NAVANEETH.N.NATH SRI.P.G.JAYASHANKAR, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.01.2026, ALONG WITH WA.2142/2025 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA NO. 2142 OF 2025 6 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. These Writ Appeals impugn the judgment dated 03.04.2025 of a learned Single Judge in WP(C) Nos.26492, 26493, 26520, 39367, and 39376 of 2024. The brief facts necessary for the disposal of these Writ Appeals are as follows: 2. The Writ Petitions aforementioned were filed by employees of an entity known as "Attinad Software Pvt. Ltd", who were aggrieved by the demand of income tax equivalent to the amount of Tax Deducted at Source (TDS) by the employer entity from out of the salaries paid to them. It was the contention of the appellants/writ petitioners that their employer, having deducted amounts towards tax at source from the salaries paid to them, did not remit the said deducted amounts to the Income Tax Department and consequently, they were asked to pay the said tax amounts at the time of finalisation of their individual assessment under the Income Tax Act (for short 'the IT Act'). 3. The appellants contend that in view of the specific provision of Section 205 of the IT Act, which prohibits a direct demand of tax deductible at source from an assessee, they could not have been made liable to income tax to the extent of the amount that had already been deducted by their employer at the time of payment of the salaries to them. Reliance was placed by the WA NO. 2142 OF 2025 7 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 appellants on the following judgments of the Supreme Court in support of their contention in CIT v. Eli Lilly & Company (India) (P) Ltd. [(2009) 15 SCC 1], Sanjay Sudan v. Asst. CIT [(2023) 452 ITR 107 (Delhi)], CIT v. Om Praksh Gattani [(2000) 242 ITR 638] and Chintan Bindra v. CIT [(2023 SCC OnLine Del 7539] and the unreported judgment of the Bombay High Court in Aslam Checkar v. Income Tax Officer (Judgment dated 10.09.2024 in Writ Petition (L) No.2442 of 2024 and connected cases). 4. The learned Single Judge, who considered the Writ Petitions took note of the provisions of Section 199 and Section 205 of the IT Act and found that on a joint reading of the two provisions, the prohibition under Section 205 would operate only if there had been a tax deduction at source by the employer in the manner contemplated under Section 199 of the IT Act. The learned Judge reasoned that in view of the fact that there was no payment by the employer to the central government/Income Tax department of the Tax deducted from the salaries paid to the employee, the Income Tax Department could not have been asked to grant credit of the TDS to the appellants at the time of completion of their individual assessments under the IT Act. While arriving at the said finding, the learned Single Judge placed reliance on a Division Bench judgment of the Gauhati High Court in CIT v. Om Praksh Gattani [(2000) 242 ITR 638] as also the Judgment dated 10.09.2024 of the Bombay High Court in Aslam Checkar v. Income Tax Officer in Writ Petition (L) No.2442 of 2024 and connected cases to find that since the amounts deducted as TDS from the salaries paid to them had not been remitted by the employer to the Central Government/Income Tax Department, WA NO. 2142 OF 2025 8 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 the appellants could not be granted the relief of a direction to the Income Tax Department to grant credit to the extent of tax deducted from their salaries by the employer concerned. 5. On going through the reasoning of the learned Single Judge in the impugned judgment, we find ourselves in complete agreement with the same. A reading of Section 199 and Section 205 of the IT Act would clearly suggest that the prohibition under Section 205 is only against calling upon an assessee to pay the TDS amount directly to the Department. The said provision, however, begins with the words "where tax is deductible at source under the forgoing provisions of this Chapter". In our view, as rightly understood by the learned Single Judge, the prohibition can only arise in situations where there has been a deduction of tax at source as contemplated under Sections 192 & 199 of the IT Act. The provisions of Section 199 of the IT Act clearly indicate that no credit for tax deducted at source can be granted to an assessee claiming the same unless a deduction of tax at source has been made in accordance with the provisions of the IT Act and paid to the Central Government. On the facts of the instant case, what is significant is that the demand made by the Income Tax Department is not for an amount equivalent to the TDS from the assessees concerned; the demand in these cases is of the tax payable by the assessees (appellants) consequent to the completion of their assessment for the relevant assessment year under the IT Act. Under normal circumstances, when an assessment is completed against an assessee similar to the appellants herein, the amounts lying to their credit by way of tax deducted at source would be adjusted against the tax liability WA NO. 2142 OF 2025 9 2026:KER:185 WA NO. 2146 OF 2025 WA NO. 2147 OF 2025 WA NO. 2148 OF 2025 & WA NO. 2149 OF 2025 determined under the respective assessments. In the instant case, the appellants were called upon to pay the tax equivalent to the tax amount deducted at source by the employer, only because there was no amount by way of credit to be adjusted against the tax liability determined against them in their assessment. In our view, the remedy of the appellants would lie only in proceeding against their employer for a recovery of the salary amount short paid to them, under the guise of tax deducted at source. We also note that the learned Single Judge had while disposing the Writ Petitions protected the interest of the appellants by observing that if any amount is recovered from the employer pursuant to steps initiated by the Income Tax Department against them under the provisions of the IT Act, credit of any amounts recovered vis-a-vis the appellants shall be given to them and the demands to the extent of such recovered amount would stand effaced. In our view, the above relief is the best that the appellants can aspire for under the scheme of the statute, and hence, we see no reason to interfere with the impugned judgment of the learned Single Judge. The Writ appeals, therefore, fail and are accordingly dismissed. Sd/- DR. A.K.JAYASANKARAN NAMBIAR JUDGE Sd/- JOBIN SEBASTIAN JUDGE mns