Dear Ashish,

In the instant case, the Income Tax Department has no authority to demand the tax again from the employer, if the same has already been paid by the employee. In this regard, you can refer Instruction No. 275/201/95-IT(B), dated 29-1-1997 issued by CBDT, under which it is stated that the demand for non/short deduction of tax should not be enforced against the Payer if he satisfies the Income-tax Authority that such taxes have been paid by the Payee.In this connection the decision of Supreme Court in Hindustan Coca Cola Beverages Ltd 2007 AIR 2930 may be of use, which confirms that the department could not recover once again the tax from the deductor where the tax has already been paid by the recipient. It was also pointed out by the Apex Court that this will not alter the liability to charge interest under Section 201 (1A) of the Act till the date of payment of taxes(if it proves to be wrong) or the liability for penalty under Section 271C of the Income-tax Act.

Hope the above suffice.

I also agree with the answer given by Mr ashish, IT Dept cannot demand tax from employer if whole tax is paid by the employee, And even if such a demand has been raised , just write a reply letter to the IT Dept mentioning everything , that employer was aware of payment of advance tax by employee , resulting in short deduction of TDS by the employer.

No issue, write to tax deptt for cancel the demand on basis of facts...

Agree with experts.

I agree with above answer.

I agree with above answer.