2021 (2) TMI 863 - HC - Income Tax

Recovery proceedings - Short payment of TDS - It is the case of the writ applicant that, in spite of the fact that, the writ applicant has not received any order under Sections 201(1)/201(1A) of the Act, 1961, the recovery notices are still being issued by the Assessing Officer for the recovery of the short payment - HELD THAT - It appears that, although the stance of the respondent herein is that the outstanding demand in subject is under the verification and the correction/deletion of the outstanding demand is under the process at the level of CPC, Ghaziabad (U.P). The Commissioner of Income Tax (CPC), Ghaziabad (U.P) is not before us as one of the party respondents. However, as the controversy is in narrow compass, we dispose of this writ application with a request to the Commissioner of Income Tax (CPC), Ghaziabad (U.P) to effect the necessary correction/deletion of the outstanding demand shown online within a period of four weeks from the date of receipt of this order. Registry shall forward one copy of this order to the Commissioner of Income Tax (CPC), Aaykar Bhavan, Sector-3, Vaishali, Ghaziabad, Uttar Pradesh.

Summary

Issues:
1. Writ application under Article 226 of the Constitution of India seeking relief from recovery notices for TDS short payment.
2. Discrepancy in TDS credit and recovery notices issued by the Assessing Officer.
3. Pending matter between Income Tax Officer and Commissioner of Income Tax for correction/deletion of outstanding demand.

Analysis:
1. The writ applicant, a Partnership Firm, sought relief from recovery notices dated 04.06.2018 and 24.12.2018 for the assessment year 2009-10, amounting to ?2,34,020 due to short payment of TDS. The applicant had deducted TDS as per Income Tax Act, 1961, and filed the TDS return for the relevant year. Despite not receiving any order under Sections 201(1)/201(1A) of the Act, recovery notices were continually issued by the Assessing Officer.

2. Responding to the recovery notices, the applicant provided necessary information to the Assessing Officer requesting credit for the TDS deposited and cancellation of the demand raised. However, the respondent authority did not grant credit or provide reasons for not doing so, continuing to issue recovery notices. The matter was brought before the Court through the writ application due to these circumstances.

3. During the proceedings, the Revenue's Senior Counsel highlighted a letter from the Income Tax Officer to the Commissioner of Income Tax (CPC), Ghaziabad, requesting a reduction in demand on TRACES. The matter was pending with the Commissioner, as mentioned in the affidavit-in-reply. The affidavit stated that the outstanding demand was under verification and correction/deletion process at the CPC, Ghaziabad. The Court, noting the narrow compass of the controversy, disposed of the writ application, requesting the Commissioner to make the necessary corrections or deletions of the outstanding demand within four weeks from the date of the order. The Court directed the Registry to forward a copy of the order to the Commissioner for compliance.