Limitation Period for Amending Returns Does Not Bar Uploading

Limitation Period for Amending Returns Does Not Bar Uploading Original Pending TDS Returns

Issue

Whether the limitation period introduced under Section 200(3) for amending TDS returns bars an employer from uploading original pending TDS statements for periods prior to Assessment Year 2023-24, and whether an employee can be held liable for tax deducted at source by an employer but not deposited with the Revenue.

Facts

Deduction Without Deposit: The petitioner-employee had TDS deducted from their salary by respondent-employers, but the deducted tax was neither deposited with the Income Tax Department nor were the corresponding TDS statements/returns filed.
Compliance by Select Employers: During proceedings, Respondent Nos. 5 and 6 filed/uploaded the pending TDS returns and deposited the corresponding tax amounts. Respondent Nos. 7 and 8 failed to file counter affidavits.
Misinterpretation of Section 200(3): Respondent No. 4 (Sub-Divisional Animal Husbandry Officer) took the stand that due to the six-year limitation introduced under Section 200(3) for making corrections/amendments to TDS statements, original pending returns for periods prior to AY 2023-24 could no longer be uploaded on the portal.
Employee Harm: The petitioner was left without proper tax credit due to the non-filing of returns and non-deposit of deducted tax by the employers.

Decision

Section 200(3) Limitation Inapplicable to Original Returns: Held that the limitation period under Section 200(3) applies strictly to making corrections or amendments to already filed returns; it does not bar the initial filing or uploading of original pending TDS statements [Paras 11 and 18].
Direction to Upload Pending Statements: Respondent No. 4 was directed to file and upload the original pending TDS returns within three weeks [Paras 11 and 18].
Employer as ‘Assessee in Default’: Held that employers who deduct TDS from an employee’s income but fail to deposit it or file returns are ‘assessees in default’ under Section 201 [Paras 15, 16, and 19].
Protection of Employee: Held that an employee cannot be penalized or denied tax credit due to a default committed solely by the employer [Paras 15, 16, and 19].
Departmental Recovery Actions: Held that statutory provisions already exist for the Department to recover unpaid TDS as a charge on the employer’s assets, and the Commissioner of Income Tax (TDS) is empowered to take all necessary action against defaulting employers without requiring specific court directions [Paras 15, 16, and 19].

Key Takeaways

Original vs. Amended Filings: Statutory time limits restricting corrections or amendments under Section 200(3) cannot be used as an excuse by deductors to avoid filing original, unfiled TDS returns for past assessment years.
Immunization of Deductees: Employees from whose salary tax has been deducted at source cannot be pursued for tax recovery or deprived of tax credits due to their employer’s failure to deposit the tax or submit returns.
Strict Enforcement Against Defaulting Deductors: Employers failing to remit deducted TDS automatically become ‘assessees in default’, empowering the Revenue to enforce recovery against the employer’s assets under Section 201.

HIGH COURT OF PATNA

Md. Shahid Ahmad Siddiqui

Principal Commissioner of Income-tax

Rajeev Ranjan Prasad and Ramesh chand Malviya, JJ.

Civil Writ Jurisdiction Case No. 20499 of 2025, 6441 of 2026

SEPTEMBER 10, 2026

Niraj Kumar, Bikash Kumar Sharma and Ms. Madhuri Kumari, Advs. for the Appellant. Sushil Kumar, GP, Mrs. Archana Sinha, Sr. SC, Ms. Shilpi Keshri, Jr. S.C., Alok Kumar, Manish Kumar Paswan, Advs., Narendra Kumar Singh, AC, Jawed Gaffar Khan, CGC and Vivek Prasad for the Respondent.

ORDER

1. The matter has been heard for sometime.

2. A counter affidavit has been filed on behalf of the respondent nos. 5 and 6. In paragraphs ‘7’, ‘8’, ‘9’ and ’10’ of the said counter affidavit, the respondent nos. 5 and 6 have shown that they have taken steps for filing/uploading of the statements of deduction of tax and payment thereof in the Treasury. In paragraph ’12’ of the counter affidavit, it is stated that all pending TDS returns for the relevant assessment years stand duly filed, updated and uploaded on the portal of the Income Tax Department (hereinafter referred to as the ‘Department’). According to these respondents, nothing further remains pending or unacted upon on the part of the answering respondents.

3. In this case, the Commissioner, Income Tax (TDS) is not a party respondent, therefore, learned Senior Standing Counsel for the Department submits that to duly verify the facts stated in the affidavit of respondent nos. 5 and 6, the Commissioner, Income Tax, TDS, Patna be added as one of the respondents.

4. In view of the above submission, let the Commissioner, Income Tax (TDS), Patna, Central Revenue Building, Veerchand Patel Marg, Patna be added as respondent no. 9 in course of the day.

5. Since Ms. Archana Sinha, learned Senior Standing Counsel accepts notice for the respondent no. 9, no separate notice is required to be issued.

6. The respondent nos. 7 and 8 have not filed any counter affidavit even as the matter is being heard for last two dates. We do not understand this approach of respondent nos. 7 and 8 in sitting over the matter and not filing any counter affidavit.

7. By way of one indulgence, we are granting two weeks’ time to respondent nos. 7 and 8 to file a counter affidavit and take remedial measures as may be advised to them, failing which this Court shall consider imposing cost against the respondent nos. 7 and 8 on the next date of hearing.

8. The Commissioner, Income tax, TDS, Patna shall also look into the cases of other employers in this case including respondent nos. 7 and 8 who have though deducted the TDS, but not deposited the same and have not submitted the returns.

CWJC No. 6441 of 2026

9. In this case, a counter affidavit has been filed by respondent no. 4 who is the Sub-Divisional Animal Husbandry Officer, Bhabhua, Kaimur. In his counter affidavit, unlike the stand of the same Department in CWJC No. 20499 of 2025, he has taken a stand that in view of the amendment introduced in Section 200(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act of 1961′) whereby a prescribed time limit has been provided for the amendment, the Department is unable to carry out amendment in respect of the periods prior to Assessment Year 2023-2024. According to him, because of the six years’ period of limitation introduced in matter of filing of an amended statement or in the matter of carrying out corrections, at this stage, the respondent is unable to modify the records maintained on the Income Tax portal.

10. It, however, appears to this Court that respondent no. 4 has not made any statement in his counter affidavit that earlier a statement/return of the TDS for the relevant years was filed by the Department.

11. To this Court, it appears that the statements made in the counter affidavit of respondent no. 4 are only half-hearted statements. The fact is that the respondent no. 4 has not filed the statement of TDS and return thereof. It is not a case of carrying out corrections/amendments in the filed return of the TDS, therefore, the respondent no. 4 is not correct in taking a stand such as in paragraph ‘9’ of the counter affidavit. We reject this stand.

12. We would briefly say that in terms of the scheme of Sections 200, 200-A and 201 of the Act of 1961, the respondent employers who deducted the TDS from the petitioner, but have not filed the returns and have not deposited the money are the assessee in default. According to the first proviso to sub-section (1) of Section 201, if 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 payee or on the sum credited to the account of a payee shall not be deemed to an assessee in default in respect of such tax if such 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.

13. Sub-section (2) of Section 201 very clearly states that where the tax has not been paid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in sub-section (1-A) 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).

14. Ms. Archana Sinha, learned Senior Standing Counsel for the Department has, having understood the scheme of the statute, submitted that this Court may pass an order directing the Department to recover the money from the employers who have deducted the money, but not deposited with the Department so far.

15. We are of the opinion that once the provision exists in the statute book for the recovery of the money from the assets of an assessee in default taking the said money as charge on all his assets, no separate direction from this Court is needed. Failure to act in terms of the statute cannot be explained by seeking a direction from the Court to act. It is for the competent authority in the Department to explain as to why they have not acted in terms of the statute so far against the assessee in default.

16. From the scheme of the statute, it is evident that the employer who deducts the money from the salary of the employee as a Tax Deducted at Source (TDS) acts as an agent and a hand of the Department of Income Tax in the matter of deduction, collection and remittance thereof to the Department. It is for that reason only the statute declares such person who failed to act and fulfill their obligations under the statute as an assessee in default. The petitioner cannot be punished for the default committed on the part of the employer.

17. In view of the above, we direct the Commissioner, Income Tax (TDS) to verify the statements/returns filed by respondent nos. 5 and 6 in CWJC No. 20499 of 2025 and after verification, he will do the needful to address the grievance of the petitioner.

18. Similarly, we direct respondent no. 4 in CWJC No. 6441 of 2026 to act in terms of the statutory provisions within a period of three weeks from today, file the statements/returns of the TDS as has been done by respondent nos. 5 and 6 in CWJC No. 20499 of 2025.

19. It will be open to the Commissioner, Income Tax (TDS), Patna to take all such action as may be required to ensure compliance by the employers.

20. Let this case be listed under the same heading on 12^th of October, 2026 to report the compliance with the directions issued by the Court hereinabove.