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Notice u/s 143(1) from cpc for tax demand

CA Subin VR (Practicing CA) (450 Points)

12 November 2013

Hi,

One of our client had received notice u/s 143(1) from CPC, Bangalore for the AY 2013-14 for demanding tax of Rs.20,000/-

He is an employee, and the employer had fully deducted and deposited the above tax amount to govt.

But the employer had not filed the TDS return till date.

Form 16 is available with the client.

Please advice how to proceed with.

Whether a letter with copy of form 16 to CPC is sufficient ?

Thanks in advance

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2 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 12 November 2013

You may write to your AO requesting him to give you tax credit on the basis of form 16.

CA Kedar Sakhardande (Proprietor) (942 Points)
Replied 13 November 2013

Hello

In your assessee case, you have mentioned that till date the employer has not filed TDS Return. But it does not say as to whether the Employer has paid the TDS Deducted.

Now there are 2 situations

1) The Employer has paid the TDS Deducted

2) The employer has not paid the TDS deducted

1) If the TDS is paid:

You can represent the AO with the TDS Certificates and Challan (if availible from employer) and indemnity bond

and the AO cannot deny the Tax credit

The AO is not justified in denying credit for TDS on the ground that the TDS is not reflected in the computer generated Form 26AS. In Yashpal Sahwney 293 ITR 539 the Bombay High Court has noted the difficulty faced by taxpayers in the matter of credit of TDS and held that even if the deductor had not issued a TDS certificate, still the claim of the assessee has to be considered on the basis of the evidence produced for deduction of tax at source. The Revenue is empowered to recover tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government. The Delhi High Court has in Court On Its Own Motion Vs. CIT 352 ITR 273 directed the department to ensure that credit is given to the assessee even where the deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by assessee regarding deduction of tax at source and on the basis of indemnity bond.”

2) In case TDS deducted is not paid at all

THen the ultimate liability of tax payment is of the assesee and he has n recourse than to recover it with interest from the Employer.

Regards