Bombay High Court
MEENAKSHISUNDARAM SANKARNARAYANversusDEPUTY COMMISSIONER OF INCOME TAX CIRCLE AND ORS
- Decided
- Disposal
- Disposed Off
Holding
TDS credit cannot be denied merely because it is not reflected in Form 26AS; credit must be allowed if satisfactory evidence of deduction is produced.
Summary
The petitioner, an employee, sought credit for TDS deducted by his employer, arguing that the denial of credit by the Assessing Officer was based solely on the amount not appearing in Form 26AS. The High Court examined the direction of the CIT(A) that no credit could be given without Form 26AS reflection and considered the recent Supreme Court decision in Manohar Jhunjhunwala, which enumerated documents that can serve as satisfactory evidence of TDS deduction. The Court held that the CIT(A)'s direction was contrary to law and set aside both the CIT(A)'s order and the Respondent's order refusing credit. It directed the Assessing Officer to re‑examine the petitioner’s documents within six weeks and grant credit if the deduction is substantiated. The writ petition was disposed of without costs, and the matter was placed on board for compliance reporting.
Issues considered
- Whether TDS credit can be denied solely because it is not reflected in Form 26AS.
- Whether documents such as salary slips, appointment letters, payroll workings, and related communications constitute satisfactory evidence of TDS deduction.
- Whether the Assessing Officer must reassess the claim in light of the Manohar Jhunjhunwala judgment.
Subjects
- TDS
- Form 26AS
- tax credit
- salary
- Income Tax Act
- High Court of Bombay
- writ petition
- assessment
- CIT
- evidence
Judgment
12.wp.6662.26.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 6662 OF 2026
Meenakshisundaram Sankarnarayanan .. Petitioner
Versus
Deputy Commissioner of Income Tax
Circle-1 & Ors .. Respondents
Mr. Nageshwar Rao (through VC) with Radha Halbe, Advocates
for the Petitioner.
Mr. Akhileshwar Sharma, Advocates for the Respondents /
Revenue.
ANJALI by
Digitally signed
ANJALI
TUSHAR
TUSHAR ASWALE
CORAM: B. P. COLABAWALLA &
ASWALE Date: 2026.09.21
12:58:53 +0530
FARHAN P. DUBASH, JJ.
DATE: SEPTEMBER 16, 2026
P. C.
1. The above Writ Petition is filed seeking a writ, order or direction
to Respondent No.1 to grant credit for taxes deducted by Respondent No.3
(the employer of the Petitioner) for the salary paid to the Petitioner. A further
relief is sought seeking to quashing the impugned intimation dated 12 th
October 2023 passed by the Centralized Processing Center (CPC) as well as
impugned order dated 7th October 2025 passed by the learned CIT(A) and the
order dated 17th February 2026 passed by Respondent No.1 to the directions
of the learned CIT(A), as being illegal and unsustainable in law.
Page 1 of 6
SEPTEMBER 16, 2026
Aswale
12.wp.6662.26.doc
2. The learned counsel for the Petitioner brought to our attention
the order dated 17th February 2026 passed by the 1st Respondent pursuant to
the directions given by the CIT(A). The aforesaid order can be found at page
59 of the paper book. The learned counsel for the Petitioner brought to our
attention paragraph 4 of the said order which reads thus:-
4. The submissions filed by the assessee have been
carefully examined and duly considered. However, the
same are found to be not acceptable. Reference is
invited to Para 5.3 of the order dated 07.10.2025
passed by the Ld. Addl./JCIT (A), Gwalior, wherein it
has been clearly observed that “If the Form 26AS
does not reflect the said TDS credit, the credit for the
same may not be given.” The said direction is explicit
and leaves no ambiguity regarding the allowability of
TDS credit strictly on the basis of reflection in Form
26AS. In the present case, as per the reply furnished
by the assessee and on verification of Form 26AS
submitted, the total TDS available for credit is
reflected at Rs.13,500/-. However, the assessee has
claimed a total TDS of Rs.38,18,358/- in the return of
income filed on 31.08.2023. Thus, there is a difference
of Rs.38,04,858/- between the TDS claimed in the
return of income and the TDS appearing in Form
26AS. Since the TDS credit can only be allowed to the
extent reflected in Form 26AS, and in view of the
specific direction of the Ld. Addl./JCIT (A), Gwalior,
the assessee is eligible for TDS credit amounting to
Rs.13,500/- only. The excess claim of Rs.38,04,858/- is
therefore not allowable and stands disallowed.
Accordingly, the total TDS credit granted to the
assessee is restricted to Rs.13,500/- as appearing in
Form 26AS.”
Page 2 of 6
SEPTEMBER 16, 2026
Aswale
12.wp.6662.26.doc
3. The learned counsel for the Petitioner pointed out that from the
reproduction of the aforesaid paragraph, it is clear that credit of TDS has
been denied to the Petitioner only because the same is not reflected in Form
26AS. The learned counsel submitted that this issue is now no longer res
integra and has been decided by this Court in the case of Manohar
Ramabtar Jhunjhunwala v/s Principal Commissioner of Income
Tax-17, Mumbai & Ors [Writ Petition No.2063 of 2025 along with
other Writ Petitions decided on 5th August 2026].
4. The learned counsel submitted that this Court in the aforesaid
decision has clearly stated certain illustrations which may constitute
satisfactory evidence of TDS being deducted and hence credit ought to be
given. In this regard, he placed reliance on paragraph 68 of this decision
which reads thus:-
“68. In salary cases, where Form 16 may not be available,
the following illustrations may constitute satisfactory
evidence, singly or cumulatively:
i. salary slips showing gross salary, tax deductions and net
salary. The salary slips are now a days computer
generated and need not contain signature and therefore,
the same may not be considered as the sole reason to
reject the slips;
Page 3 of 6
SEPTEMBER 16, 2026
Aswale
12.wp.6662.26.doc
ii. appointment / offer letter or employment contract
showing salary structure, together with bank statement
showing receipt of the corresponding net amount;
iii. employer’s payroll workings of the concerned
employee, year-end tax workings by the employer of the
concerned employee, email communications, internal
cost-to-company break-up, and any tax computation
sheet generated by the employer and shared with the
employee;
iv. communications, if any, by the employee to the
employer pointing out that tax has been deducted but
not deposited or that Form 16 has not been issued or
incorrectly issued.”
5. In fact, the learned counsel also pointed out paragraph 66 of this
judgment which clearly states that in case where TDS credit is claimed
though the amount is not reflected in Form 26AS, the claim cannot be
rejected solely on that basis. The learned counsel, therefore, submitted that
the directions given by the CIT(A) in his order dated 7 th October 2025
directing that no TDS credit can be given because the Petitioner’s Form 26AS
does not reflect the deduction of the TDS is contrary to the law laid down by
this Court, and which has been followed by Respondent No.1 in the order
passed by him on 17th February 2026.
6. Mr. Sharma, the learned counsel appearing on behalf of the
Revenue fairly stated that in light of the law laid down by this Court in
Page 4 of 6
SEPTEMBER 16, 2026
Aswale
12.wp.6662.26.doc
Manohar Jhunjhunwala (supra), the matter can be remanded to the 1 st
Respondent to conduct a fresh enquiry as to whether in fact TDS has been
deducted from the salary paid to the Petitioner. Once that enquiry is done
and the Assessing Officer is satisfied that in fact TDS is deducted as per the
directions of this Court in Manohar Jhunjhunwala (supra), necessary credit
would be given to the Petitioner.
7. Considering the fair stand taken by the Revenue, and also the law
laid down by this Court in Manohar Jhunjhunwala (supra), we hereby set
aside the impugned order dated 7th October 2025 passed by the learned
CIT(A) insofar as it gives a direction to the Assessing Officer not to give
credit of the TDS deducted merely because it is not reflected in the
Petitioner’s Form 26AS. We also set aside the order dated 17 th February 2026
passed by Respondent No.1 refusing to give credit to the Petitioner of the
TDS deducted because of the directions issued by the CIT(A).
8. We now direct the Assessing Officer, namely, the 1st Respondent
to re-examine the documents submitted by the Petitioner to substantiate his
claim that TDS has been deducted from the salary paid to him by Respondent
No.3. If the Assessing Officer is satisfied with the explanations given by the
Petitioner that TDS has been deducted from his salary, then naturally credit
Page 5 of 6
SEPTEMBER 16, 2026
Aswale
12.wp.6662.26.doc
for the same will have to be given to the Petitioner as per the directions of
this Court in Manohar Jhunjhunwala (supra).
9. We direct that this entire exercise shall be done by the Assessing
Officer within a period of six weeks from the date of this order being brought
to the notice of the Assessing Officer (1st Respondent).
10. The Writ Petition is disposed of in the aforesaid terms. However,
there shall be no order as to costs.
11. Though we have disposed of the above Writ Petition, we place it
on Board for reporting compliance on 4th November 2026.
12. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by fax
or email of a digitally signed copy of this order.
[FARHAN P. DUBASH, J.] [B. P. COLABAWALLA, J.]
Page 6 of 6
SEPTEMBER 16, 2026
Aswale
Checking your session…
Lawyer court records for this case
Associated through the court’s case reference.