TDS/TDS Certificate

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S Menon (Querist)
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07 October 2009 Dear Sir/Madam,

I have a query relating to TDS/TDS Certificate. Let me put my query by way of an illustration.
There are two parties, 'A'= the payer, 'B'= the payee. A and B have entered into a lease agreement from 2005 onwards. As a result of it A were paying rent to B. As per the provisions of the Income Tax Act, A has been regular in deducting tax from the rent payments to B, and remitting it to the credit of Govt. A is also very prompt in issuing the Form 16A to all the vendors including B.

In the year 2009, B has come up with a claim, that it has not received Form 16A for the year 2005-06 from A. As a result of which they were unable to claim the credit for that amount in their recently concluded assessment for that respective year, and ended up paying tax to that extent. Now B wants this amount reimbursed from A, whereas A has denied this claim by saying that they have issued the Form 16A to all the vendors including B, and B might have misplaced the same.

Following points should also be taken in to consideration;
1. A doesn't have any proof of dispatch of the Form 16A
2. A has not received any claim from B for Form 16A before the filing of return for the Year 2005-06.

Based on the above mentioned facts kindly advise as to whose contention is tenable, and what are the remedies available for both persons?

Thanks in advance!

Shyam Lal Naik

Shyam Lal Naik (Expert)
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07 October 2009 Probably a question fit to be placed at lawyersclubindia. How ever in my view:-

From the facts, it is undisputed that A has been making regular payment of the rent net of TDS to B. It can safely concluded that the fact of deduction of TDS is known to B.

Hence the claim for issue of a certificate/ a duplicate certificate should have been raised by B at the end of the relevant year. Secondly, the claim could have been raised at least at the time of filing of return of Income. At the worst the claim could have been made during the assessment proceeding.

The silence of B for such a long time would lead to belive any body to belive that he has received the certificate and has been granted the credit for the same.

In my view, B is estopped from raising the claim now.

So far A is concerned, law cast an obligation on the deductor to issue certificate within the prescribed time limit. It does not cast an obligation to preserve proof of such issuance. Such obligattion may not be practically posssible also.