Kartik was a pilot working in Kingfisher Airlines. The airline that collapsed has deducted the tax from his income; however, this does not furnish the TDS to the government. But the tax council furnished notice to him for failing to furnish the tax.
The issue is not limited to his income but can lead to the case of all those incomes in which the tax is deducted; however, losses are to be furnished to the government via the assessee. A Rs 3200 crore scam was revealed in the year 2018 by the income tax department, in which 447 firms deducted tax via employees’ salaries; however, they never furnished the TDS to the government.
Below is the discussion on the identical issues and the case of Kartik.
What Do You Mean by TDS Credit?
If there is any tax deducted at source and submitted through the central government, it will be actioned as a tax payment on the grounds of the person from whose income the deduction was created. In a different form, the credit of TDS will be permitted to an individual whose income tax is deducted at the source.
The tax furnished, such as TDS, TCS (Tax Collected at Source), advance-tax, and self-assessment tax, shows that in the form 26AS under income tax. The same Form 26AS is associated with the PAN of the person.
When TDS is not mentioned in Form 26AS
When the tax deducted through the assessee is not seen in the Form 26AS, then it points towards that he does not furnish the tax or the payment is furnished, but the deductor has not furnished the TDS statement or TDS return to the income tax department. Towards these 2 concerns, the credit of TDS is not allowed through the tax council, and the assessee will demand the tax via notice.
What Do You Mean by the Law?
When the tax is already furnished from the income of the taxpayer or the same is deductible, then under section 205 of the income tax, there will be no recovery proceedings towards the tax recovery. Under section 191 of the act, the individual is required to furnish the tax directly on his salary income only when the tax has not been deducted from the salary in the TDS form.
The person is not subject to paying if the tax has previously been dedicated but not furnished to the government.
What is the Cause of Tax Demand?
Because of the mismatch in the credit claimed in ITR and the TDS credit shown or available in Form 26AS, a demand for the tax is urged. The automated system at CPC (the Central Processing Centre of the Income Tax Department) distinguishes the 2 records, and if the TDS credit available within Form 26AS is lower with respect to the availed income tax credit, then a tax demand notice gets furnished to the taxpayers.
Declarations of CBDT’s Department
CBDT furnishes the guidelines for the case. The CBDT mentioned that in the matter where TDS has been deducted through the employer or deductor, however, that is not furnished to the government, the assessing officer could not urge to file tax on the recipient of the income.
What is the Reason for Issuing the Tax Demand Notice?
ITR processing is automatic and is executed through CPC. The framework is made to permit TDS credit to a limit that appears in Form 26AS. Thus, if there is any mismatch in the TDS amount, then the CPC shall ask for the tax demand.
The income tax form does not include Annexure, and thus an assessee could not attach any additional documents with the ITR in support of the TDS claim. Hence, if any issue or mismatch is revealed between the TDS shown in Form 26AS and the TDS credit availed in the income tax return (ITR), then the notice will be issued.
Before ITR filing, it is advised to find out if any mismatch is revealed and should be rectified. Thus, it is advisable to recheck Form 26AS within the mentioned duration.
What’s Next to Perform
If the assessee reveals that Form 26AS does not mention the TDS deducted from his or her income, then he must urge the deductor towards these mismatches. The TDS credit mismatch might be because of the following causes:
- (a)TDS is not furnished to the government.
- (b)TDS is furnished; however, the TDS statement has not been submitted to the tax council till now.
- (c)The deductor has cited the wrong PAN inside the TDS statement.
- (d) The wrong TDS amount is written in the TDS statement.
Deductor would only amend the mistakes. Hence, the assessee must urge his deductor to rectify these errors as soon as possible and ensure that all is corrected before furnishing the ITR.
Read Also: Solution for TDS Mismatch Between Form 26AS & 16
The assessee has no right as per the law to ask the deductor to furnish TDS or perform any amendments in the TDS statement furnished through the deductor. When the deductor refused to consider the assessee’s request, then the taxpayer would furnish TDS proof to the income tax department.
Towards answering the notice of the tax demands, the assessee could furnish an answer on the e-filing portal, where he can attach the credentials that show TDS deducted from his salary/income. The assessee could furnish his salary slips and bank statement, which reveal the credit of the net income post-TDS deductions.
AO is imposed to permit the TDS credit to the assessee when the documents furnished are all right. But if he still did not permit the credit, then the only choice is to furnish the request to the Commissioner of Income Tax (Appeals).
