In a batch of writ petitions decided on 05.08.2026 by the Bombay High Court (WP No. 2063 of 2025 and connected matters, coram B. P. Colabawalla and Firdosh P. Pooniwalla, JJ.), it was held that where tax has in fact been deducted at source, the Department must grant TDS credit and cannot recover the amount from the deductee despite the deductor’s non-deposit, following the Supreme Court’s order in Shobhan Shantilal Doshi and the Gujarat High Court’s decision in Gayatri Snehal Rao. The Court set aside demands on account of TDS deducted but not paid, remanded the matters to the Assessing Officers for fresh consideration, and framed a six-step verification mechanism requiring the jurisdictional AO to keep demands in abeyance, mark them as non-recoverable, and pass a reasoned order preferably within six months; the ruling covers domestic transactions only.
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