Byju’s deducted ₹1.49 crore TDS from Krishna’s salary But never deposited it with the Tax Dept. It happened with 23,621 employees Tax Dept sent Krishna a demand notice to pay the tax

But here’s how you can get away with ZERO liability even when your employer defaults on TDS

[1] Fact of the case:

🔸 Salary slips showed full TDS deduction

🔸 Form 26AS showed zero deposit

🔸 CPC denied credit and generated a demand

Krishna argued that he had already paid the taxes.

[2] What Income tax says about it

Section 205 provides:

🔸 When tax is deducted at source,

🔸 The assessee “shall not be called upon to pay it again”

Once deduction happens, liability shifts entirely to the employer, not the employee.

[3] CBDT Instruction No. 275/29/2014 (1 June 2015) says:

🔸 Credit mismatch demands must not be enforced

🔸 Employee cannot be penalised for employer’s failure

🔸 Deduction = tax deemed paid

This instruction directly supported Krishna.

[4] CBDT’s 2016 Office Memorandum reiterated the same:

🔸 No recovery can be made from an employee

🔸 Non-deposit by employer cannot create enforceable tax liability

ITAT noted both circulars as binding on the department.

[5]  Income Tax Appellate Tribunal [ ITAT] findings:

🔸 Deducted TDS is treated as paid by the employee

🔸 Revenue must proceed against the Byju’s (employer)

🔸 Krishna cannot be revisited for tax already deducted from his salary

Employer default doesn’t mean employee liability.

[6] ITAT also addressed judicial discipline:

🔸 Coordinate Bench rulings must be followed

🔸 High Court rulings like Om Prakash Gattani bind the department

Denying credit contradicted established jurisprudence.

[7] Final ruling:

🔸 Full TDS credit granted

🔸 Entire demand deleted

Case closed in favour of Krishna. The employer’s failure could not legally be transferred to him.