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CA. M. Lakshmanan

The Annual Tax Statement under section 203AA in From No. 26AS contains ‘Details of Tax Deducted At Source’ in Part A, ‘Details of Tax Collected At Source’ in Part B and ‘Details of Tax Paid (Other than TDS and TCS)’ in Part C basing on the data available with the department through OLTAS (On Line Tax Accounting System).

In a case where a particular Deductor deducts and if he either does not pay or if he fails to file the TDS return with full details in time, the assessee, from whom the tax is deducted, will not get credit for the tax deducted from him because this particular deduction will not find a place in the Form 26AS.  Then intimations are sent demanding the tax (already deducted) with interest. In such a situation top priority is to be given by the concerned officers for the returns filed manually and by the CPC for the e-filed returns to dispose of the rectification petitions filed with a copy of the certificate issued by the Deductor In these circumstances whether the assessee has to file the stay petition for collection of taxes, for the intimations processed at CPC, with the jurisdictional assessing officer or the CPC is not clear. Further the rectification petition and the stay petition are to be sent by ordinary post only since registered post are not accepted by CPC  and this procedure will result in unnecessary litigation at a later date regarding levy of penalty and interest for non-payment of taxes and non-acceptance of appeals due to belated filing  as there will not be any proof for filing these petitions.

Ultimately, where tax has been deducted and the certificate has been issued, the credit should be given to the assessee from whom tax has been deducted basing on the certificate issued by him even if the transaction does not find a place in From No. 26AS and appropriate action should be taken against the ‘Deductor’ who has either not paid the deducted tax correctly or not filed the TDS return correctly after due verification of the TDS certificate for its genuineness.

Many Public Sector Banks and Public Sector Undertakings neither deduct tax correctly nor file the e-TDS returns correctly in time and  certain Banks and Post Offices insist the deposit holders (who are already assessees)  to give Form 15G/Form15H to avoid the botheration of deducting, paying and e-filing, which in their opinion is cumbersome.  Whether they file the Form 15G and 15H within the stipulated time with the Commissioner of Income Tax is another question and even if filed whether the I.T. Department takes time to verify all of them and take action against the persons who makes false declaration is another big question.

It also happens that certain unrelated transactions appear in Form 26AS such as professional fees or contract payments are shown and tax is deducted, whereas the assessee in whose Form 26AS the payment appears is not at all having connections with Deductor.  This happens because of mistake in quoting wrong PAN while filing the ETDS returns.  In such cases, unless corrective steps are not taken immediately by the Assessing Officer/CPC in coordination with the officer who is in charge of TDS to eliminate such entries by calling the Deductor while these are brought to their knowledge by the affected ‘Deductee’ there is going to be false demands/refunds.

As of now if an assessee fails to deduct tax or deducts tax at a lesser rate or pay the deducted tax belatedly with interest  he can file revised ETDS returns with correct figures and these belated payments have to appear in the Form 26AS. But in the meantime if the assessee, from whom tax has been deducted belatedly, has filed his returns and paid taxes, he has to file revised return to claim the additional TDS, if the original return has been filed in time. Here also how many times and upto which date the revised ETDS returns can be filed is not clear.

To conclude the authorities, who are at the helm of affairs have to take corrective measures at the earliest to avoid huge pending demands/refunds and unnecessary paper  work and litigation.

the Article was first Published on 05th August 2010

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