15 September 2014
Govt Employer issue Form 16 (Manual-Q4 return yet to submit) for AY 2013-14.
Employee submitted return for AY 2013-14 within due date as per Form 16 with showing Refund.
Employee received Demand u/s 143(1) for demand as no such amount credited in 26AS
Please guide me : 1. Employee need to pay as per demand? 2. Any Penalty for this? 3. What action can employee take against employer for Tax not deposited or not in correct account?
At times, income tax payers get intimation of demand from the Department u/s 143(1). Most of such cases are generated due to discrepancy in income tax return and the documents on the basis of which such return is prepared including TDS certificates, Form 16/Form 16A or Form 26AS etc.
RECTIFICATION U/S 154
Income Tax Act provides for the rectification u/s 154 for the cases where demand has been intimated under above said section 143(1). Taxpayer should collect all relevant documents including Form 16 (in case of salaried employees), Form 16A, TDS Certificates, Form 26AS and Computation of total income etc. On the basis of the above documents, a proper rectification request should be prepared and submitted to the income tax department.
PROVISION OF THE ACT WHERE TDS IS NOT DEPOSITED/WRONGLY DEPOSITED
The Income Tax Department may deny credit of TDS in cases where TDS is available in Form 16/Form 16A/TDS Certificates but not available in Form 26AS. Also in some cases employer/deductor may not have deposited the said TDS or deposited in wrong PAN number. In such cases, provision u/s 5 of the Income Tax Act, 1961 shall be helpful to the taxpayer/professional.
SOME IMPORTANT CASE LAWS WHERE TDS IS NOT DEPOSITED/WRONGLY DEPOSITED
There are various judgments of the different Hon’ble High Courts where it has been decided that if the TDS is reflecting in Form 16/Form 16A or TDS certificates or the fact of TDS deduction is established, then the Department must provide the credit of the same to the concerned assessee and he/she shall not be called upon to pay the tax again to the extent to which tax has been deducted. Taxpayers/Professionals may take help of following case laws in above mentioned situations;
1. Sumit Devendra Rajani Versus Assistant Commissioner Of Income Tax 2. ACIT vs. Om Prakash Gattani (2000) 242 ITR 638. 3. Yashpal Sahni vs. ACIT (2007) 293 ITR 539. 4. Smt. Anusuya Alva vs. Deputy Commissioner of Income Tax and Others (2005) 278 ITR 206 (Karn). 5. Commissioner of Income Tax vs. Ranoli Investment P. Ltd. and Others (1999) 235 ITR 433(Guj).
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