Recently, the Allahabad High Court held that a taxpayer is entitled to a refund of Tax Deducted at Source (TDS) even if the deducted amount is not reflected in Form 26AS, provided the assessee produces valid Form 16A certificates. The decision was delivered in a writ petition concerning alleged non-refund of TDS by the Income Tax Department. The court observed that an assessee cannot be left at the mercy of the authorities when genuine claims are supported by proper documentation.
Brief Facts:
The petitioner, a cooperative society claiming exemption under Section 80P of the Income Tax Act, approached the court seeking refund of TDS amounts deducted in earlier years. Despite filing multiple applications with Form 16A certificates, the Income Tax Department refused to process the refunds, arguing that the TDS amounts were not reflected in Form 26AS. The petitioner also challenged a notice directing recovery from the society’s bank account.
Contentions:
The counsel epresenting the petitioner, submitted that the TDS amounts were refundable as the petitioner was a cooperative society entitled to exemption. He emphasized that multiple applications, along with TDS certificates, were submitted, but the authorities delayed the refunds citing mismatch with Form 26AS. Counsel argued that the Department’s refusal was contrary to established judicial precedent. Whereas, the respondents contended that refunds could not be granted unless the amounts matched the details in Form 26AS, asserting that discrepancies prevented lawful credit.
Observations of the Court:
The Court extensively referred to the Delhi High Court judgment in Court on Its Motion vs. Commissioner of Income Tax and its own decision in Rakesh Kumar Gupta vs. Union of India. The Court noted, "The statutory powers given to the Assessing Officer are sufficient and should be resorted to, and the assessee cannot be left to the mercy or the sweet will of the deductors. When an assessee approaches the Assessing Officer with requisite details and particulars, the said Assessing Officer will verify whether or not the deductor has made payment of the TDS and if the payment has been made, credit of the same should be given to the assessee."
The Court further highlighted that secondary evidence under the Indian Evidence Act can be relied upon only if the primary registered document exists but is unavailable. In the present case, the petitioner furnished Form 16A certificates proving TDS deductions, which must be accepted irrespective of Form 26AS entries.
Referring to CBDT Circular No. 05/2013, the court emphasized that Assessing Officers have the duty to verify genuine TDS claims and cannot merely rely on Form 26AS or delay refunds at their discretion. The Bench reiterated that taxpayers should not suffer due to discrepancies caused by deductors.
The decision of the Court:
The Court directed the petitioner to appear before the concerned Income Tax authority and instructed the authorities to verify the documents and process the refund within four weeks. The petitioner was permitted to rely on cited judgments and the CBDT circular. The writ petition was disposed of with the clear observation that genuine TDS claims supported by Form 16A certificates cannot be denied merely due to mismatch in Form 26AS.
Case Title: U.P. Rajya Nirman Sahakari Sangh Limited Vs. Union Of India Min.Of Finance Dept.Of Revenue Thru.Secy.Andors
Case No.: Writ (C) No. - 16125 of 2018
Coram: Justice Shekhar B. Saraf, Justice Prashant Kumar
Advocate for Petitioner: Adv. Desh Deepak Chopra, Shailesh Verma
Advocate for Respondent: Adv. A.S.G., D.K.Pathak, Kushagra Dikshit, Manish Mishra
Read Judgment @LatestLaws.com
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