Is the taxman not giving you credit for tax deducted at source (TDS) from your income? The Delhi High Court, in a recent ruling, has provided some relief. It has stated that if credit for TDS has not been given due to discrepancies in name, permanent account number, address, etc., between the tax records and the assessee’s claim, the assessing officer can summon and compel the tax deductor to upload the correct details.

The discrepancies arise due to the laxity of the tax deductors or the banks with whom the TDS has been deposited by the deductors. Banks are required to upload the particulars of tax deposited into the Tax Information Network. At present, if the deductor furnishes wrong particulars, such as the PAN number of an employee, or simply sits tight on the TDS amount, the employee’s goose is cooked. Ditto when the bank errs in periodically uploading the data on TDS deposited with it.

Current rules expect the taxpayers to lodge a formal complaint with the assessing officers about the discrepancy, and follow it up with the deductor as well.

Spare taxpayers

The Delhi High Court’s order requires the tax officer to spare the taxpayer of the second burden. This is because no amount of pleading on the part of the taxpayers is likely to be as effective as an authoritative diktat from the officialdom.

The High Court took the initiative in this matter by converting an April 2012 letter by chartered accountant Anand Prakash into a public-interest litigation. To this was added the writ petition filed by the All-India Federation for Tax Practitioners.

Both highlighted the plight of taxpayers arising out of computerisation of TDS records and recognising only the TDS information uploaded by collecting banks onto the Tax Information Network on the basis of information submitted by the deductors.

(The author is a New Delhi-based chartered accountant.)

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