Employer must deposit deducted tax or refund it with interest upon failure to remit to authorities.

The applicant, a 64-year-old retired government employee, retired from service on June 30, 2020

Upon her retirement, the respondents deducted ₹19,424 towards income tax but allegedly failed to deposit this amount with the Income Tax Department

Consequently, the Income Tax Department issued a notice to the applicant under Section 143(1) of the Income Tax Act, 1961, demanding payment for the differential tax

The applicant submitted a representation on May 25, 2023, and subsequent follow-ups requesting the respondents to either deposit the tax or refund the deducted amount, but no action was taken

The applicant then filed the present Original Application (OA) under Section 19 of the Administrative Tribunals Act, 1985, seeking directions for the respondents to revise Forms 24G and 24Q, issue a proper Form 16, and credit the disputed amount

1. Whether the respondents failed to fulfill their statutory obligation to deposit Tax Deducted at Source (TDS) and whether they should be directed to rectify the applicant's tax records and credit the deducted amount.

2. Whether the applicant is entitled to a refund of the deducted amount with interest if the respondents failed to deposit the tax with the relevant authorities.

The Tribunal applied Section 19 of the Administrative Tribunals Act, 1985, which empowers the Tribunal to adjudicate disputes regarding the service matters of government employees

It referenced Section 143(1) of the Income Tax Act, 1961, concerning the processing of returns and issuance of notices for tax discrepancies

Furthermore, the court applied the administrative principle of "reasoned and speaking orders," requiring authorities to formally address employee grievances within a stipulated timeframe

The Tribunal noted the applicant’s grievance that despite the deduction of tax at the source by her employer, the non-remittance of the same to the Income Tax Department resulted in a personal tax liability and notice under Section 143(1)

During the proceedings, the applicant narrowed her request to a direction for the respondents to decide her pending representation

The respondents' counsel expressed no objection to this course of action

The Tribunal reasoned that the respondents have a duty to rectify any errors in tax deposition.

It held that if the respondents are found to have defaulted in depositing the tax, they must either complete the deposit or refund the money to the applicant with interest at the applicable GPF rate, thereby providing the applicant with the necessary funds and legal standing to resolve the notice issued by the Income Tax Department

The respondents are ordered to pass a "reasoned and speaking order" within eight weeks from the receipt of the order

The Tribunal specifically held that if a mistake in tax deposition is confirmed, the respondents must either deposit the tax with the Income Tax Department or refund the amount to the applicant with GPF-rate interest

No costs were awarded