Employee Cannot Be Denied TDS Credit Due to Kingfisher Airlines’ Default in Depositing Tax: Delhi HC [Read Order]
The Delhi High Court ruled that an employee cannot be denied TDS credit due to Kingfisher Airlines’ failure to deposit the tax deducted from salary.
![Employee Cannot Be Denied TDS Credit Due to Kingfisher Airlines’ Default in Depositing Tax: Delhi HC [Read Order]](https://images.taxscan.in/h-upload/2026/01/23/2121572-employee-cannot-be-denied-tds-credit-due-to-kingfisher-airlines-default-in-depositing-tax-delhi-hc-taxscan.webp "Employee Cannot Be Denied TDS Credit Due to Kingfisher Airlines’ Default in Depositing Tax: Delhi HC [Read Order]")
In a recent ruling, the Delhi High Court held that an employee cannot be denied TDS credit only because Kingfisher Airlines failed to deposit the tax deducted from the employee salary. The petitioner, Venkatachalam Thangavelu, challenged an intimation issued under Section 143(1) of the Income Tax Act for the assessment year 2012-13, by which a demand of Rs. 12,28,508...
In a recent ruling, the Delhi High Court held that an employee cannot be denied TDS credit only because Kingfisher Airlines failed to deposit the tax deducted from the employee salary.
The petitioner, Venkatachalam Thangavelu, challenged an intimation issued under Section 143(1) of the Income Tax Act for the assessment year 2012-13, by which a demand of Rs. 12,28,508 was raised after the department refused to give credit of TDS deducted by Kingfisher Airlines. The department had also adjusted the petitioner refunds to recover part of the demand.
The petitioner’s counsel argued that once TDS is deducted from salary, the employee cannot be penalised for employer’s failure to deposit the same, and relied upon an earlier Delhi High Court judgment in Satwant Singh Sanghera. The revenue counsel did not dispute this position but objected to the court jurisdiction, stating that the assessing officer was later shifted to Bangalore.
In reply, the petitioner’s counsel explained that at the time of filing the return, the petitioner assessing officer was located in Delhi and later transfer of jurisdiction cannot defeat the maintainability of the petition.
The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar rejected the preliminary objection and observed that territorial jurisdiction has to be decided with reference to the position existing on the date of filing of the writ petition.
On merits, the court observed that the revenue may proceed against the employer, but the employee cannot be denied TDS credit for no fault on his part.
The court quashed the intimation denying TDS credit, declared the demand and recovery as illegal, and directed the department to refund the recovered amount with interest within three months.
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