No direct demand on assessees if TDS already deducted
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
New Delhi, 11 th March, 2016
Subject: - Non-enforcement of recovery of demand against the assessee
where tax has been deducted but not deposited by the deductor -
regarding
The Central Board of Direct Taxes had issued directions to the field
offices that taxpayers whose tax has been deducted at source but not
deposited to the Government’s account by the deductor, will not be asked
to pay the demand to the extent tax has been deducted from his income. A
letter to this effect was issued on 01.06.2015.
Through this letter an embargo had been put on direct demand against the
assessees in cases where the tax demand is on account of tax-credit
mismatch due to non-payment of TDS to the Government account by the
deductor.
Instances have come to the notice of the Board that these directions are
not being strictly followed in field offices. An Office Memorandum has
therefore been issued on 11.03.2016 reiterating the contents of the
letter.
It has been reemphasized that the assessing officers shall not enforce
demands created on account of mismatch of credit due to non-payment of
TDS amount to the credit of the Government by the deductor. The Office
Memorandum dated 11.03.2016 is available[see below] on the website of the
Department www.incometaxindia.gov.in. (Shefali Shah)
Pr. Commissioner of Income Tax (Media and Technical Policy) and Official Spokesperson, CBDT
Non-deposit of tax deducted at
source by the deductor- Recovery of demand against the deductee assessee.
F.No.
275/29/2014-IT (B)
Government
of India
Ministry
of Finance
Central
Board of Direct Taxes
(CBDT)
New Delhi,
Dated: 11th March, 2016
Office
Memorandum
Sub: Non-deposit of tax deducted at
source by the deductor- Recovery of demand against the deductee assessee.
Vide letter of even number dated
01.06.2015, the Board had issued directions to the field officers that in case
of an assessee whose tax has been deducted at source but not deposited to the
Government’s account by the deductor, the deductee assessee shall not be called
upon to pay the demand to the extent tax has been deducted from his income. It
was further specified that section 205 of the Income-tax Act, 1961 puts a bar
on direct demand against the assessee in such cases and the demand on account
of tax credit mismatch in such situations cannot be enforced coercively.
2. However, instances have come to
the notice of the Board that these directions are not being strictly followed
by the field officers.
3. In view of the above, the Board
hereby reiterates the instructions contained in its letter dated 01.06.2015 and
directs the assessing officers not to enforce demands created on account of
mismatch of credit due to non-payment of TDS amount to the credit of the
Government by the deductor. These instructions may be brought to the notice of
all assessing officers in your Region for compliance.
This issues with the approval of
Member (Revenue &TPS).
sd/-
(Sandeep Singh)
Under Secretary (Budget)
Source: http://irsofficersonline.gov.in/Documents/OfficalCommunique/13142016100330.pdf
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