TDS — Statutory authority — Duty to be fair in its commercial dealings — Statutory authority entering into contract with firm for supply of material and performance of engineering work — Tax deducted at source not deposited with Department — Statutory authority retaining part of bill amounts due to firm for its income-tax contingency — Statutory authority had no right to retain any amount due to firm — High Court directed the statutory authority to return withheld amount with interest — Cost imposed on statutory authority to be recovered from its managing director.

28. (2025) 474 ITR 271 (Jharkhand):

Anvil Cables (P) Ltd. vs. State of Jharkhand:

Date of order 08.04.2024:

Sections 195 and 201(1A)

TDS — Statutory authority — Duty to be fair in its commercial dealings — Statutory authority entering into contract with firm for supply of material and performance of engineering work — Tax deducted at source not deposited with Department — Statutory authority retaining part of bill amounts due to firm for its income-tax contingency — Statutory authority had no right to retain any amount due to firm — High Court directed the statutory authority to return withheld amount with interest — Cost imposed on statutory authority to be recovered from its managing director.

The petitioner-firm provided comprehensive engineering, procurement and construction services to the core sector industries in India. The State authority JBVNL entered into a contract with the petitioner for rural electrification work. The JBVNL deducted tax at source at two per cent. From the bill raised by the petitioner for the supply of material and also retained an amount on the pretext of “Income-tax contingencies”. The petitioner requested the JBVNL to release s