harsh(ca finalist) (i) (62 Points)
28 April 2012i have recently received letter from IT about payment of tax of AY 2008-09 u/s 143(1)
i have form 16 issued by employer and the TDS deduucted is only amount which is my tax payable in the AY 2008-09
further i have submitted my investments u/s 80c to avail exemption of rs.100000 and my tax liability during that year was nil
Now they send me demand notice for payment of tax with interest.
What to do nowwww?
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 29 April 2012
Mr.Harsh
Please verify your Tax Credit Statement (Form No.26AS) whether you have got the credit for the TDS for the concerned year. If you do not get credit for the TDS in your Tax Credit Statement (Form No.26AS), you will not get credit for the same as prepaid taxes while processing your return of income u/s 143(1) of Income-tax Act, 1961. For this reason a demand arose in your intimation u/s 143(1) which is considered itself as a demand notice u/s 156 aslo.
The reasons for not getting credit for the TDS in your Tax Credit Statement (Form No.26AS) may be that the person who has deducted tax at source from the payment made to you,
(i) did not deposit the deducted tax to the credit of cental governemnt
or
(ii) did not file TDS returns as required u/s 206
or
(iii) there might be some mistakes in the TDS return filed by the deductor which were not rectified
Hence
(i) you have to verify your Tax Credit Statement (Form No.26AS), if TDS is given credit in the Tax Credit Statement you can move an application u/s 154 requesting the Assessing Officer to give due credit for the TDS.
(ii) if no credit is given for the TDS in the Tax Credit Statement, contact the person who deducted tax at source from the payment made to you
and
(iii) inform the fact to the Assessing Officer and request him to keep the demand in abeyance till the TDS is given credit in your Tax Credit Statement.
Best Wishes
Sathikonda
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 30 April 2012
Mr.Harsh
In your Querry you have mentioned - "INTIMATION U/S 245". Section 245 empowers the Income-tax Authorities to set off refunds against tax remaingng payable i.e. if any arrears are due for the earlier asssessment years from the assessee the Income-tax Authorities can invoke the provisions of section 245 and adjust the refund due to the assessee against the arrears of the earlier assesment years. But the Income-tax Authorities are under legal obligation to inform the concerned assessee regarding the action to be taken by them in respect of adjustment of refund against the arrears of earlier assessment years.
Nowadays when the returns are processed u/s 143(1) by CPC, the Income-tax Authorities are not informing the concerned assessee before they invoke the provisions of section 245. It is manddatory on the part of the Income-tax Authorities to inform the assessee.
An assessee has got every right to bring the inconvenience caused to him to the notice of higher authorities.
Best Wishes
Sathikonda
CAclubindia
