Delhi HC's interim directions on PIL: If TDS amount rightly reflected in Form 26AS, small or technical mismatches in TDS return should not result in denial of TDS credit

Delhi HC's interim directions on PIL: If TDS amount rightly reflected in Form 26AS, small or technical mismatches in TDS return should not result in denial of TDS credit. However, if AO still feels credit of TDS reflected in Form 26AS should be denied, he should issue notice to assessee to revise or correct mistake. If still not corrected, then only order under section 143(1) should be passed and demands should be raised

• Denying benefit of TDS to a tax payer because of fault of the deductor, which is not attributable to the deductee, is a serious matter and causes unwarranted harassment and inconvenience.

• Revenue cannot be a silent spectator and wash their hands or express helplessness.

• This problem is normally faced by the small taxpayers including senior citizens as they do not have Chartered Accountants and Advocates on their pay roles.

• The marginal amount involved compared to the efforts, costs and frustration, makes it an unviable and a futile exercise to first approach the deductor and then the Assessing Officer.

• Rectification and getting the corrections done and to get them uploaded is not easy.

• Most of the assessees will and do write letters but without response and desired results. This aspect must be examined by the Board and appropriate steps to ameliorate and help the small tax payers including senior citizens should be taken and implemented.

• CBDT must examine whether section 272BB prescribing penalty of Rs.10,000 for deductor's failures can be invoked where complaints are received from the tax payers that in spite of requests, the deductors fail to rectify the defects or upload the correct TDS details.

• There can be small and insignificant mismatches, which if purely technical should be condoned or ignored. After all tax has been paid or credited in the name of the assessee.

• Once the amount is correctly and rightly reflected in Form 26AS, small or technical mismatch in the return should not be a ground to deny credit of the amount paid. In such cases, if the Assessing Officer feels that benefit of TDS reflected in 26AS should not be given, he should issue notice to the assessee to revise or correct the mistake and only if the necessary rectification or correction is not made, an order under section 143(1) should be passed and the demand should be raised. This is an interim direction.

• Every attempt possible has to be made to redress the grievance of the tax payers.

• The tax payers should not be made to run around, make repeated visits to deductor or the Assessing Officer.

• Rejection of TDS, which has been deducted and paid, hurts the assessee and puts him to needless inconvenience, harassment and costs. It gives bad name to the Revenue

• Matter to be Relisted on 2nd November, 2012. Affidavit in terms of this order will be filed within six weeks.

• All India Federation of Tax Practitioners permitted to intervene in the present matter. W.P.(C) 5443/2012 will be taken up for hearing along with this matter. - [2012] 25 taxmann.com 131 (Delhi)