Employer deducted TDS but never deposited it

Sec 205 says you cannot be asked to pay tax directly to the extent it was deducted from your income. A CBDT Office Memorandum of 11 March 2016 tells officers not to enforce such demands against the employee. You need proof that tax was actually deducted.

If your gross salary was ₹10 lakh and payslips show ₹70,000 TDS with net pay credited to your bank, that ₹70,000 should not be recovered from you again under Sec 205. CPC may still show a demand because the credit is missing, so respond to the demand disagreeing and cite the OM, and raise a grievance with the Assessing Officer. The department can recover the money from the employer with interest under Sec 201(1A). Keep payslips and bank credits as your main proof.