Although the tax deductor want to satisfy the Income Tax department by deducting TDS on any sum, such act amounts to harassment. In a case before Consumer Court, the Punjab National Bank was penalised for deducting unjustified TDS. Read on:
The district consumer disputes redressal forum has directed the Punjab National Bank to pay Rs 20,000 as compensation to Om Parkash, a resident of Mohali, for harassing him. The bank allegedly deducted Tax Deduction at Source (TDS) of Rs 471 from the interest of Rs 5,000 in gross violation of the income tax rules.
The complainant had deposited Rs 50,000 as fixed deposit with the bank at the rate of 6.5 per cent per annum on March 3, 2007. On the maturity of the deposit, the bank returned him the interest amount of Rs 4611 after deducting Rs 471 as TDS. The complainant said the bank officials deducted the tax in violation of the income tax guidelines, according to which, no tax can be deducted if the interest on the principal amount is less than Rs 5,000 per annum. He alleged that the bank officials did not pay any heed to his complaint and send him another TDS form deducting Rs 478 for the same fixed deposit.
The bank officials, however, claimed there was an error in their computer programme due to which the tax was deducted automatically. They said they had already tendered an apology to the complainant.
The consumer forum, after hearing to both the parties, said the bank was grossly deficient in rendering service due to which the complainant was harassed and humiliated.
(Source: www.expressindia.com)
CAclubindia
