U.P. Rajya Nirman Sahakari Sangh Limited Vs Union of India (Allahabad High Court)
The Allahabad High Court delivered a significant judgment addressing a common point of contention between taxpayers and the Income Tax Department: the denial of credit for Tax Deducted at Source (TDS) when the amount is not accurately reflected in the taxpayer’s Form 26AS.
The Background and Petitioner’s Grievance
The case was filed by U.P. Rajya Nirman Sahakari Sangh Limited (the Petitioner), a Cooperative Society claiming exemption under Section 80P of the Income Tax Act, 1961. The Petitioner approached the High Court seeking relief against the actions of the Income Tax Department, specifically challenging a notice dated December 5, 2017, issued under Section 226(3) of the Act. This notice was an administrative directive to the Petitioner’s bank to pay ₹3.50 crore directly from the Society’s account, essentially initiating coercive recovery action for an outstanding tax demand.
The core of the Petitioner’s claim was a failure by the Department to allow credit for the TDS amount for multiple Assessment Years (A.Y. 2009-10 to 2012-13 and A.Y. 2015-16). The Petitioner argued that despite filing multiple applications for a refund and providing the necessary TDS certificates (Form 16A), the Department was unwilling to process the refund. The Department’s refusal was predicated on the sole ground that the TDS amount was not reflected in the Petitioner’s Form 26AS.
