Mismatch of tax deducted at source with Form 26AS is a problem which is felt by almostevery assessee and in particular those who have a claim for refund.
In a recent judgement, Hon’ble Allahabad High Court has ruled that credit for tax deducted at source must be given by the Income Tax Department even in case of mismatch of TDS with Form 26AS where assessee produces TDS Certificates.
In the instant case, Rakesh Kumar Gupta, a civil contractor (Petitioner) filed his Income Tax Return with refund claim of Rs. 2,32,370/- but CPC Bangalore issued refund for Rs. 43740/- only without attributing any reason for non refund of the entire claim. Even after moving application for rectification under section 154 of the Income Tax Act, the petitioner was not given refund. Later in the course of hearing, the Income Tax Department admitted that refund was allowed only to the extent TDS claimed matched with Form 26AS.
The Hon’ble Court ordered the refund of Rs.1,88,631/- along with interest and with cost of Rs.25,000/- in addition to the refund.
While delivering the judgement, the Hon’ble Court commented as under:
“There is a presumption that the deductor has deposited TDS amount in the government account especially when the deductor is a government department. By denying the benefit of TDS to the petitioner because of the fault of the deductor causes not only harassment and inconvenience, but also makes the assessee feel cheated. Thereis no fault on the part of the petitioner. The fault, if any, lay with the deductor. In the instant case, nothing had been indicated that the fault lay with the petitioner in furnishing false details.”
The Court further commented,
“No effort was made by the assessing officer to verify the fact as to whether the deductor had made the payment of the TDS in the government account. On the other hand, the Income Tax Department has shown their helplessness in not refunding the amount on the sole ground that the details of the TDS did not match with the details shown in Form 26AS.”
“………the assessing officer was under a duty to verify whether or not the deductor had made the payment of the T.D.S. in the government account”
The Hon’ble Court also referred to the judgement of Hon’ble Delhi High Court in respect of mismatch of TDS. The Court referred to CBDT Instruction No. 5 of 2013 dated 08/07/2013 which instructs that when an assessee approaches the Assessing Officer with requisite details and TDS certificate, the Assessing Officer shall verify the credit of TDS in the Government Account and on confirmation, credit of TDS should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS with the relevant AO (TDS).
Download Judgement of Allahabad High Court >>
Download Judgement of Delhi High Court >>
Download CBDT Instruction No. 05/2013 >>
