Whether assessee can be denied TDS credit on basis of form 26AS mismatch without fault of assessee?

Last updated: 07 June 2014

Court :
Allahabad High Court

Brief :
Petitioner was a civil contractor deriving by executing civil contracts in various Government Departments. For the AY 2010-11, the petitioner received certain payments from the Government Departments and a total sum of Rs.3,14,766/- was deducted as TDS. His gross income for AY 2010-11 was Rs.6,86,650/- with tax liability Rs.82,295/- and thus claimed a refund of Rs.2,32,370/-. The CPC Bangalore issued refund of Rs.43,740/-. No intimation was given to the petitioner for non refund of balance amount of Rs.1,88,630/-.The petitioner filed an application twice u/s 154 praying for refund. Frustrated, the petitioner filed the present writ petition under Article 226 of the Constitution of India praying for refund along with interest to the petitioner. The Department claimed that refund was allowed only of that amount which matched the TDS in Form 26AS and the balance amount was not refunded since it was mismatched and, therefore, credit was not given on those TDS certificates. It was held that mismatching is not attributable to the assessee and was fault of deductor. Delay in refunding the amount was attributable solely with Income Tax Department and there is no fault on the part of the assessee. Thus the department was directed to grant refund along with interest and pay cost of Rs.25,000/- to the petitioner.

Citation :
Rakesh Kumar Gupta – Petitioner- versus - Union of India and another - Respondent