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S. Murlidharan

“As the field formations are aware, the requirement of annexing TDS certificates with the return of income has been dispensed with. The TDS certificates are now issued only for the purpose of personal record of the deductees subject to the condition that they may be required to produce the same on demand before the assessing officer in terms of Section 139C, inserted by the Finance Act, 2007,” says Circular No. 2 dated May 21, 2007, among other things.

The newly inserted Section 139C, vide the Finance Act, 2007, indeed gives the CBDT the power to make rules to dispense with the requirement of attaching TDS certificates or for that matter any document normally required to be attached by Section 139(9).

It appears that no such rules have been made as is also evident from the language of the above circular, which curiously talks of the field formations being aware of the decision to dispense with attachment of TDS certificates. Had this power been exercised vide appropriate rule, everyone, public as well as the field formations, would have been aware.

Be that as it may, the news is going to warm the cockles, especially of those who accumulate thousands of TDS certificates, assiduously file them away and meticulously attach them with the return lest credit therefor is denied at the time of assessment.

It must however be noted that those who deduct tax at source cannot rejoice now. They have to wait till April 1, 2008, because Section 203(3) abolishes the need for issuing TDS certificates only in respect of payments made on or after April 1, 2008. The bottomline is: Till such time, TDS certificates have to be issued by the payer and preserved by the receiver of income. And from April 1, 2008, they simply don’t have to be issued, with the result there is no question of assiduously preserving them and filing them with the return.

The rather premature but pleasant relief from the tedium of submitting TDS certificates along with the return in a way reflects the upbeat mood of the Department.

The implicit message is the Department is already equipped to cross verify the claim made by the assessees as to payment of tax vide TDS through the data available within. This is a good augury.

Apparently, this interregnum of a year is proposed to be used as a trial run —should things go awry within the Department, assessees could be called upon to produce the TDS certificates. That the Finance Act, 2007 has stuck to the deadline of April 1, 2008, for dispensing with need for issuing TDS certificate shows that glitches if any in the system would be removed by then.

More Stories on : Taxation | Income Tax | Reassessment

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