TDS Mismatch : A.O Not to Demand Tax , in TDS Already Deducted : CBDT

0
2357
Print Friendly, PDF & Email

TDS mismatch is a big issue for Indian tax payers . Something which is already provided in the Income Tax Act is not being followed by many in the Income Tax Department. CBDT has issued an instruction dt 01/06/2015 to bring this issue in attention of all A.O that section 205 of the Income Tax Act prohibits demand of the tax on the deductee if it is established that tax was already deducted at source .

Unfortunately, neither the law nor the Board’s instruction matter for some official . This is clear from the para 2 of the fresh circular  “However, instances have  come  to the  notice  of the Board  that these  directions    are not being strictly  followed  by the field officers “.

Board has once again instructed the tax official not not  to  enforce  demands  created  on account  of mismatch  of credit  due  to non-payment    of TDS  amount  to the  credit  of the Government   by  the  deductor.

Circular on TDS Mismatch

F.No.   275/29/2014-IT   (B) Government  of lndia Ministry  of Finance

Central   Board of Direct Taxes

(CBDT)

New Delhi,   Dated:    11th    March,  2016

Office Memorandum

Sub:  Non-deposit  of tax deducted  at source  by the deductor-  Recovery of demand against the deductee assessee.

Vide  letter  of even  number  dated  O 1.06.2015,    the  Board  had  issued  directions   to the field officers  that in case of an assessee  whose tax has  been deducted  at source  but not deposited  to the Government’s   account  by the deductor,   the deductee  assessee  shall not be called   upon  to pay the demand  to the  extent  tax has  been  deducted  from  his  income.  It was  further  specified  that  section  205  of the  Income-tax  Act,  1961 puts a bar  on direct demand   against    the  assessee   in  such  cases  and  the  demand   on  account   of  tax  credit mismatch    in such situations  cannot  be enforced  coercively.

  1. However, instances have  come  to the  notice  of the Board  that these  directions    are not being strictly  followed  by the field officers.
  1. In view of the above, the Board  hereby  reiterates  the instructions    contained  in its letter dated  01.06.2015   and  directs   the  assessing  officers  not  to  enforce  demands  created  on account  of mismatch  of credit  due  to non-payment    of TDS  amount  to the  credit  of the Government   by  the  deductor.   These   instructions   may  be  brought  to  the  notice   of  all assessing  officers   in  your Region   for compliance.

This  issues   with the approval   of Member  (Revenue  &TPS).

(Sandeep Singh)

Under Secretary  (Budget)