CPC-TDS established procedure for refund of excess TDS deposited
ABCAUS Case Law Citation:
ABCAUS 3333 (2020) (07) HC
In the instant case, a writ petition had been filed seeking a direction to the Income Tax Department to remove technical glitches and enable the TRACES portal so that petitioner could file its refund application for the excess Tax Deduction at Source (TDS) deposited by it.
The petitioner had deposited TDS by challan against which amount adjusted was quite less leaving the outstanding excess unclaimed deposit.
According to the petitioner, it was unable to claim refund of the unclaimed excess TDS amount as the online TRACES portal showed ‘Maximum Refund Allowed’ as ‘Nil’ against the said Challan. Instead excess TDS was shown in the column of ‘Remaining Available Balance’ in respect of Challan whereas it should have appeared under the head ‘Maximum Refund Allowed’.
The ticket raised by the petitioner was closed without resolving the issue faced by the petitioner.
The Petitioner alleged that non-refund of the excess TDS amount deposited is violative of Section 200A of the Income Tax Act, 1961 (the Act) read with Rule 31A(3A) of the Income Tax Rules (the Rules) as well as CBDT Circular No. 2/2011 dated 27th April, 2011.
Before the Hon’ble High Court, the Income Tax Department stated that in like cases, scrutiny and verification of the TDS amount utilised has to be manually done according to the established procedure.
According to the Revenue, pending the development and implementation of the online functionality of refund at TRACES portal, CPC-TDS has prescribed the following standard procedure:
(i) Deductor has to approach jurisdictional TDS Assessing Officer with the grievance.
(ii) Jurisdictional TDS Assessing Officer will forward this grievance to CPC-TDS via e-mail on aohelpesk@tdscpc.gov.in or through post.
(iii) CPC-TDS will accordingly guide the Assessing officer to inform the deductor to tick the option “Refund due to Appeal effect” to place the refund request. By doing so deductor will be able to place the refund request with zero amount as well and the refund request will not get rejected by the system. A request number will be generated.
(iv) Deductor will inform this request number to the Jurisdictional Assessing Officer and Jurisdictional TDS Assessing Officer will confirm the same to CPC-TDS by sharing the refund request number. This refund request number is required by CPC-TDS for record purpose for future referencing.
(v) This online refund request generated as per the above mentioned point no. iii is further forwarded to TDS Assessing Officer. Assessing Officer will have the right to enhance the refund amount from Zero to the amount available in the challan and also upload the relevant documents supporting the genuineness of the facts and reasons for refund.
(vi) After approval from the competent Authority refund request will be processed in online manner.”
The Hon’ble High Court directed the petitioner to follow the aforesaid procedure and the Revenue was directed to decide the petitioner’s request within four weeks thereafter.
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