Tax laws/rules regarding notice period salary recovery

Naveen (Salaried employee) (21 Points)

27 June 2023  
I have a scenario where I want to understand upon whom income tax liability falls in case notice period salary is recovered by a company, as per the income tax act (or if there are any recent amendments or considerations done w.r.t such cases)
 
An employee's salary account is credited with regular monthly salary by his employer company.

Before crediting salary by the company, that amount of money was not taxed to the company. (if I am right)
After salary is credited to the employee's account that money is subjected to income tax payable by the employee.
In one case when the employee resigned the job the company takes back the previous two months' salary amount from the employee (as notice period penalty deduction) and the employee is also subjected to pay income tax on that deducted two months salary amount.

After that amount of money is received into the account of the company, as what such money is considered as?
Revenue?
Taxable income?
Loss recovery?
any other ?

If it is considered as revenue, and when no expenditure or loss can be shown on it, then that amount of money is subjected to tax payable by company. (if I am right)
In that case the employee also pays tax on the money deducted for him, and the company also pays tax on the same money it received.

So two times tax is paid on one same money.
Employee paid tax on the money he did not receive for himself.
Company paid tax on the money it recovered from that employee. 
 
In such a case who is entitled for tax exemption?
Employee? (who did not get that money)
Employer? (who received that money)
None? (both have to pay tax)
 
Are there any tax laws&rules regarding notice pay recovery cases? Any section in the income tax act refer to such case?