Patna High Court
Sharda ConstructionversusPrincipal Chief Commissioner of Income Tax (TDS), Income Tax Department,Patna
- Decided
- Disposal
- ALLOWED
Holding
The Department of Income Tax must verify the authenticity of the deductor’s TDS certificates and, if genuine, give full credit for the TDS and issue any refund with statutory interest.
Summary
The petitioners, a group of construction firms and a HUF, filed writ petitions seeking mandamus directing the Income Tax Department to credit tax deducted at source (TDS) by Punjab National Bank for various assessment years, arguing that the bank had issued valid Form‑16A certificates and deposited the tax in the government account. The Department contended that credit could be given only after verifying that the deductor had filed returns and actually deposited the amount, relying on Section 199, Rule 37 BA and related provisions. The Court examined the statutory provisions, noting that the certificates contained all required details and that the Department had not denied their correctness. It held that where the deductor’s certificate is genuine, the Department is statutorily obliged to credit the TDS and, if no adverse finding emerges, to issue refunds with statutory interest. Accordingly, the Court directed the Department to verify the certificates within one month, give full credit, and process refunds with interest, disposing of the writ applications.
Issues considered
- Whether the Income Tax Department must credit TDS deducted by a deductor when a valid certificate of deduction and deposit is produced, even if the amount is not reflected in Form 26AS.
- Whether the Department can refuse credit on the ground that the deductor has not filed its TDS return or that the deposit is not verified on the portal.
- Whether mandamus can be issued directing the Department to give credit and refund with statutory interest.
Legislation cited
- Income Tax Act, 1961 — s. 199, 200, 200A, 201, 203, 203A, 205, 206C, 234A, 234B, 234C, 234D
- Income Tax Rules, 1962 — s. Rule 31(1)(b), Rule 31AB, Rule 37BA
Subjects
- TDS
- Tax Deducted at Source
- Credit of tax
- Mandamus
- Income Tax Act
- Form 26AS
- Refund
- Statutory interest
- Civil writ jurisdiction
- High Court
Judgment
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
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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
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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
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6. In the writ application, there is an averment that the
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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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:-
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“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).
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(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).
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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).
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(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).
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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).
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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).
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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).
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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,
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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
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