2020 (11) TMI 612 - HC - Income Tax

Rectification of TDS mismatch - seeking refund along with interest for the delayed period from the date of deduction of TDS to the date of actual granting of refund - amount of ₹ 1,15,034/- was deducted by the Life Insurance Corporation of India from the payment made to the petitioner towards TDS, while tax payable by the petitioner for the assessment year 2007-08 was only ₹ 64,025/-. The petitioner was awaiting refund. - HELD THAT - As seen that TDS has been deducted as per Ext.P3 Certificate issued by the Life Insurance Corporation of India. According to the petitioner, the petitioner produced original of Ext.P3 along with Ext.P1 ITR. The case of the respondents is that this remittance is of the year 2007-08 and its entry is not reflected in Database. When the petitioner asserts that original of Ext.P3 has already been submitted before the Income Tax Authorities, the petitioner cannot be called upon to produce the original again. Writ petition is disposed of directing the respondents to consider Ext.P6 rectification application with reference to Ext.P3. The first respondent will be at liberty to get necessary information from the Life Insurance Corporation to decide the issue. While deciding the issue the first respondent shall also consider whether necessary reduction is to be given towards interest dues, to the petitioner.

Summary

Issues:
1. Quashing of Ext.P5 and rectification of TDS mismatch
2. Refund with interest for delayed period
3. Non-reflection of TDS amount in the Department's database
4. Requirement of original TDS Certificate for credit

Analysis:
1. The petitioner sought to quash Ext.P5 and rectify the TDS mismatch by considering Ext.P2 Return and Ext.P3 Form 16A TDS Certificate. The petitioner filed income tax return for 2007-08, with TDS of ?1,15,034 deducted by LIC, while tax payable was ?64,025. Ext.P5 demanded ?99,030, prompting the petitioner to file Ext.P6 for rectification due to the existing TDS credit with the respondent.

2. Respondents contended that original TDS Certificate was not furnished, leading to non-credit of ?1,15,034 during return processing under Section 143(1). They argued the TDS amount was not in the Department's TDS Database, necessitating enquiries to verify its genuineness and proper crediting to the Central Government account.

3. The Court noted TDS deduction as per Ext.P3 Certificate from LIC, submitted by the petitioner along with Ext.P1 ITR. Despite the petitioner's submission of the original Ext.P3, the Department claimed non-reflection in the Database for the 2007-08 remittance. The Court ruled that the petitioner need not re-produce the original, directing consideration of Ext.P6 with reference to Ext.P3 and obtaining necessary information from LIC.

4. Consequently, the writ petition was disposed of, instructing the respondents to evaluate the rectification application in light of Ext.P3. The first respondent was authorized to gather details from LIC for resolution, including a review for potential reduction in interest dues owed to the petitioner. The judgment emphasized fair consideration of available evidence and cooperation with relevant entities for a just decision.