It is common problem faced by Income tax payers that they get demand notice along with penalty (sometime) for the grounds on which they don't have any control like :-
(i) TDS Deductor has committed some mistake while filing his TDS Return consequently figure shown in assessee ITR does not match with figure provided by the deductor to the department, or
(ii) Data given in ITR does not match with data of department because nodal agency ( NSDL or bank collecting Tax) not updated their files in time or not uploaded correctly.
In the situation , Income Tax payer either get demand notice or some time not getting refund for which he is very much eligible.
Last year, Honourable Delhi High Court in a Public Interest Litigation in Court On its Own Motion vs. Commissioner of Income Tax, 2013 (352) ITR 273 took it seriously and the Court noticed that:-
(1) there were cases where the deductor
failed to upload the correct and true particulars of the TDS, which
had been deducted, as a result of which, the assessee was not
given credit of the tax paid.
(2) there were cases where the details uploaded by the deductor
and the details furnished by the assessee
in the income tax returns were mismatched
and, on this ground, credit was not given
to the assessee.
(3) on
account of mismatch, the tax payer was required to approach the income tax authority for rectification of the earlier intimation and based on corrected entries
prayed for refund of the TDS.
Hon'ble Court found that the
problem was apparent,
real and enormous and had escalated because of centralised computerisation
and problems associated with incorrect
and wrong data, which was uploaded by the tax deductors. The Delhi High Court found that the issue of not giving credit of the TDS deducted by the deductor was one of general governance, failure of administration,
fairness and
arbitrariness and filing of an application
u/s -154 for rectification
and correction by the assessee
entails substantial expenses
on the part of the
assessee.
The Court, accordingly, issued
a mandamus directing the Central Board of Direct Taxes
(i.e. “CBDT”) to issue directions with regard to giving credit of unmatched and mismatched TDS certificates.
Pursuant to the said decision
of the Delhi High
Court, the CBDT issued instruction
No.5 of 2013, dated 8.7.2013.
CBDT directed that where the assessee approaches the
assessing officer with requisite details and particulars in the form of TDS certificate as an evidence against any mismatch amount, the AO
would verify whether or not the deductor had made payment of the TDS in the government account and, in the event, the payment had been made, credit of the same would be given to the assessee.
would verify whether or not the deductor had made payment of the TDS in the government account and, in the event, the payment had been made, credit of the same would be given to the assessee.
However still Income tax payer is facing problems.
Recently Hon'ble Allahabad high court in the case of Rakesh Kumar Gupta Vs. UOI & Others [Civil misc W.P.(Ta x) No.657 of 2013 has held that since the
mismatching is not attributable
to the assessee and the fault
solely lay with the deductor, for the reason refund should be given to the Assessee and the
delay in refunding the amount was attributable
solely with the Income Tax Department and there is no fault on the part of the assessee.further Court directed to pay interest on refund amount to the assessee and directed to cost of an amount Rs.25000/-
ITAT Mumbai in case of LSG Sky Chef (India) Pvt. Ltd vs. DCIT also held similar ruling and said thatassessee cannot be denied credit for TDS on the ground of descripency in form 26AS filed by the deductor.
Though Form 26AS (r/w r.31AB and ss.
203AA and 206C(5)) represents a part of a wholesome procedure designed by the
Revenue for accounting of TDS (and TCS), the burden of proving as to why the
said Form (Statement) does not reflect the details of the entire tax deducted
at source for and on behalf of a deductee cannot be placed on an
assessee-deductee. The assessee, by furnishing the TDS certificate/s bearing the
full details of the tax deducted at source, credit for which is being claimed,
has discharged the primary onus on it toward claiming credit in its respect.
He, accordingly, cannot be burdened any further in the matter. The Revenue is
fully entitled to conduct proper verification in the matter and satisfy itself
with regard to the veracity of the assessee’s claim/s, but cannot deny the
assessee credit in respect of TDS without specifying any infirmity in its
claim/s. Form 26AS is a statement generated at the end of the Revenue, and the
assessee cannot be in any manner held responsible for any discrepancy therein
or for the non-matching of TDS reflected therein with the assessee’s claim/s.
Where so, no doubt a matter of concern, is one which is to be investigated and
pursued by the Revenue, which is suitably armed by law there for. The plea that
the deductor may have specified a wrong TAN, so that the TDS may stand
reflected in the account of another deductee, is no reason or ground for not
allowing credit for the TDS in the hands of the proper deductee. The onus for
the purpose lies squarely at the door of the Revenue
Source :-
(ii) court decision as stated above
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