Assessee can claim Refund of TDS paid twice or excess

Since no provision is made in the Act or the Rules for claiming refund of excess TDS deducted with respect to remittance to the foreign company, CBDT issued its circular No. 769, dated 6-8-1998 and made provision for granting such refund to the Indian assessee deductee under the following circumstances:

(i) after the deposit of tax deducted at source under section 195,

(a) the contract is cancelled and no remittance is required to be made to the foreign collaborator;

(b) the remittance is duly made to the foreign collaborator, but the contract is cancelled and the foreign collaborator returns the remitted amount to the person responsible for deducting tax at source;

(c) the tax deducted at source is found to be in excess of tax deductible for any other reason.

Under such circumstances it was provided that in the type of cases referred to above, a refund may be made independent of the provisions of the Income-tax Act, 1961 to the person responsible for deducting the tax at source from payments to the non-resident, after taking the prior approval of the Chief Commissioner concerned.

It is not in dispute that subsequently in the circular no. 790, dated 20-4-2000 the third category mentioned in clause (i)(c) of paragraph 1 of circular dated 6-8-1998 came to be deleted and only two categories mentioned in clause (i) (a>) and (b) were retained. In para (9) of the circular dated 20-4-2000, it was clarified that the refund was not to be issued to the deductor of tax in the cases referred to in clause (i)(c) of paragraph 1 of circular No. 769, dated 6-8-1998. [Para 7]

Clause (i)(c) of paragraph 1 of circular No. 769, dated 6-8-1998 was sufficiently wide and would cover variety of cases of refund of excess tax deducted at source. The assessee deposited the amount of tax twice for the same payment only due to oversight. Such overpayment was required to be refunded. This was the only ground raised in the impugned communication. In the reply filed by the Commissioner, two more grounds are sought to be raised. One that the circular dated 6-8-1998 was superseded by subsequent circular dated 20-4-2000, and two that the foreign company was liable to pay tax; the contract was executed as per the agreement and the assessee was not entitled to any refund. One is not able to accept either of the two objections. The case of the assessee was required to be considered under circular dated 6-8-1998 which was prevailing when the application was filed. Any subsequent change made long thereafter could not be applied in the instant case. The assessee filed its application promptly and shortly after the event of deducting the tax in excess of liability. Such an application which was though filed on 2-11-1998 was not decided for a long period of time despite repeated reminders from the assessee. Nearly one year and six months passed when the Board issued fresh circular dated 20-4-2000. In that view of the matter, subsequent circular could not have been applied. Simply because the contract was completed did not mean that the assessee was liable to deduct tax twice. It was a pure mistake.

The opposition in respect of both the counts, therefore, must fall. Firstly case of the assessee would fall under clause (i)(c) of para (1) of circular no. 769, dated 6-8-1998. Subsequent deletion of such provision by virtue of circular dated 20-4-2000 could not have been applied to the assessee. Quite independent of both the circulars, deduction of tax at source twice and depositing with Government twice was a pure mistake. The revenue cannot retain any amount that the assessee paid under pure mistake particularly, when the refund thereof was claimed shortly after the second payment was made and mistake was detected. Contention of the revenue that deduction at the time of remittance was not a tax and, therefore, not refundable is self contradictory when it also contends that refund of tax is not covered either under circular dated 6-8-1998 or under circular dated 20-4-2000. If the amount deposited with the Government of India was not taxable at all, there was no question of holding on such amount deposited with the Government under mistake. [Para 9]

Under the circumstances, the original sum of Rs. 19.49 lakhs must be refunded to the assessee on the application being made. Such refund should carry reasonable interest at least after reasonable period of the assessee making application for such refund. No doubt, in circular dated 6-8-1998, as also in circular dated 20-4-2000, it is clarified that on such refund no interest under section 244A would be payable since such amount is not a tax. However, such provision cannot be applied in the instant case. Firstly, present is not a case of tax deducted at source which was later on found to be in excess of the assessee liability. Present is a case where out of sheer mistake, an amount was deducted twice and also deposited with the Government. As per the revenue, the deduction of Rs. 19.49 lakhs and depositing with the Government at the time of making provision for payment was not a tax at all. If that be the position, such amount which was deposited with the Government under mistaken belief ought to have been refunded, even without reference to any of the circulars. Both the circulars essentially governed the situations where the tax at the time it was deducted at source is rightly deducted and deposited. However, due to subsequent developments such tax deposited with the Government turns out to be in excess of the liability of the deductee. Such deductee would be entitled to refund thereof. But being a foreign company and not regularly assessed to tax in India, may not be interested in pursuing such refund claims. To obviate such hardship, circulars made special provision enabling the assessee to claim refund under certain circumstances. In the instant case, the assessee deposited an amount which was not required to be deposited at all. Such amount was deposited purely on mistake. The revenue could not and should not have tried to capitalize on such a mistake. On the revenue passing the refund claim, within a reasonable period from the assessee making application for such purpose, the interest liability to that extent could have been avoided. However, such application was firstly not decided for a long time and thereafter was wrongly rejected. The revenue must pay reasonable interest. Under the circumstances, the revenue was to be directed to refund to the assessee the sum of Rs. 19.49 lakhs with simple interest for the period after expiry of four months from the date of receipt of the application dated 2-11-1998 till actual payment.

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Transfer of PANs Of Non-Resident Assessees

      No Comments on Transfer of PANs Of Non-Resident Assessees

LETTER [F.NO. ADDL. DIT/INTL. TAXATION/2012-13], DATED 19-9-2012

Jurisdiction over non-resident assessee lies with the AOs under administrative control of DGIT (Intl. Tax). It has been observed by DGIT (Intl. Tax.) that PAN of many non-resident assessees are lying with the AOs who do not have jurisdiction over them.

2. PAN not lying in correct jurisdiction poses many operational and administrative difficulties, e.g. in some cases where AAR report is required to be sent and if, PAN is not in correct jurisdiction, the situation often leads on to incorrect and erroneous report. Similarly AO cannot view the e-filed returns of an assessee if the PAN is not with them. As a result they cannot examine their returns for selection of scrutiny, survey, TDS monitoring, grievances handling etc.

3. Accordingly, a list of all such PANs where the return of income was e-filed for AY 2011-12 and lying with AOs who do not have jurisdiction over non-resident assessee has been obtained from O/o DGIT System. The total of such PANs are 64697. RCC wise breakup of such PANs is attached as per Annexure  A and RCC wise and Formwise breakup is attached as per Annexure  B.

4. The breakup of these PANs as per return form filled is as under:

DISTRIBUTION OF PAN AS PER FORMS OF RETURNS OF INCOME

FORM_NAME

Total of PAN

ITR-1

30042

ITR-2

23876

ITR-3

1944

ITR-4

5670

ITR-4S

674

ITR-5

965

ITR-6

1391

Total

64697

5.I am directed by Hon’ble Chairman, CBDT to inform all concerned CCsIT/DGsIT regarding the pendency of such PANs in their charge and request them to transfer such PANs by 24.09.2012 afternoon or else automatic transfer will be resorted to in a week time.

6. Please take this matter on priority.

ANNEXURE – A

RCC wise breakup of PANs lying in domestic jurisdiction

S. No.

RCC

CCA

No. of PANs

1

Agra

UP(W)

324

2

 Ahmedabad

Ahmedabad

2651

3

Allahabad

UP(E)

217

4

Amritsar

NWR

399

5

Bangalore

Bangalore

6583

6

Baroda

Ahmedabad

1469

7

Bhopal

Bhopal

1257

8

Bhubaneshwar

Bhubaneshwar

217

9

Chennai

Chennai

4132

10

Coimbotore

Chennai

602

11

 Delhi

Delhi

6977

12

 Hyderabad

Hyderabad

2781

13

 Jabalpur

Jabalpur

417

14

Jaipur

Jaipur

1102

15

Jalandhar

NWR

928

16

Jodhpur

Jaipur

846

17

Kanpur

Kanpur

206

18

 Kochi

Kochi

1482

19

Kolhapur

Pune

191

20

Kolkata

Kolkata

2299

21

Lucknow

UP(E)

563

22

 Madurai

Chennai

389

23

 Meerut

UP(W)

1336

24

 Mumbai

Mumbai

14480

25

 Nagpur

Nagpur

471

26

Nashik

Pune

357

27

Patiala

NWR

1146

28

 Patna

Patna

236

29

 Pune

Pune

4647

30

 Rajkot

Ahmedabad

924

31

Ranchi

Patna

391

32

 Rohtak

NWR

1769

33

 Shillong

NER

144

34

 Surat

Ahmedabad

1436

35

Trivandrum

Kochi

785

36

 Vizag

Hyderabad

410

   

Total

64697

ANNEXURE – B

RCC wise and Form wise Breakup

RCC

Total Of ID

ITR-1

ITR-2

ITR-3

ITR-4

ITR-4S

ITR-5

ITR-6

AGR

324

168

82

4

47

4

16

3

AHM

2651

860

1191

128

329

30

83

30

ALD

 217

97

42

5

42

13

16

2

AMR

399

200

90

18

49

11

28

3

BBN

217

136

52

2

23

2

1

1

BLR

6583

4116

1971

87

308

14

8

79

BOM

14480

5369

6655

545

1069

35

224

583

BPL

1257

581

399

33

176

25

27

16

BRD

1469

631

514

141

140

20

14

9

CAL

2299

960

999

51

171

45

38

35

CHN

1482

679

485

118

179

11

4

6

CMB

602

250

230

25

73

8

15

1

DEL

6977

3417

2495

127

545

73

60

260

HYD

2781

1485

1017

70

160

10

20

19

JBP

415

211

73

7

69

26

23

6

JDH

846

450

163

9

128

68

24

4

JLD

928

438

239

57

123

25

38

8

JPR

1102

607

256

49

125

25

17

23

KLP

191

73

58

6

32

11

8

3

KNP

206

124

50

1

22

3

1

5

LKN

563

298

155

9

72

10

17

2

MDS

4132

2044

1629

68

316

12

22

41

MRI

389

152

151

18

61

1

4

2

MRT

1336

866

317

14

97

20

16

6

NGP

471

192

145

7

90

16

16

5

NSK

357

120

154

3

41

8

10

21

PNE

4647

2039

1971

87

355

20

39

136

PTL

1146

653

319

23

100

20

23

8

PTN

236

108

85

5

29

2

5

2

RCH

391

235

114

5

30

6

1

 

RKT

924

211

425

90

124

19

44

11

RTK

1769

1098

398

19

139

34

33

48

SHL

144

70

32

2

24

5

4

7

SRT

1436

466

555

74

240

39

58

4

TVD

785

448

218

24

89

2

2

2

VPN

410

190

147

13

53

1

6

 
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Format of CA Certificate to Furnish in case of Failure to deduct TDS / TCS

In Budget 2012 CBDT has introduced a provision w.e.f. 01.07.2012 by which a person who has defaulted in payment of TDS / TCS will not be deemed to be a person in default if he furnishes a certificate from CA to the effect that the person in respect of whom default is committed

(i) has furnished his return of income under section 139;

(ii) has taken into account such sum for computing income in such return of income; and

(iii) has paid the tax due on the income declared by him in such return of income and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:

The above was done by inserting proviso to sub-section (1) of section 201 & to sub-section (6A) of section 206C. The CBDT has now issued the format of such certificates (Form 26 A for default in Payment of TDS & Form No.27BA for default in Payment of TCS) and issued a notification related to same which is as follows:-

Income-tax (Eleventh Amendment) Rules, 2012 Insertion of rules 31ACB, 37J, Form Nos. 26A & 27BA Notification no. 37/2012 [f.no. 142/18/2012-so(tpl)], dated 12-9-2012

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (11th Amendment) Rules, 2012.

(2) They shall come into force on the date of publication in the Official Gazette.

2. In the Income-tax Rules, 1962, (hereafter referred to as the “said rules”-

(a) after rule 31ACA, the following rule shall be inserted, namely:-

Form for furnishing certificate of accountant under the first proviso to sub-section (1) of section 201

31ACB. The certificate from an accountant under first proviso to sub-section (1) of section 201 shall be furnished in Form No.26;

(b) after rule 37-I, the following rule shall be inserted, namely:-

“Form for furnishing certificate of accountant under first proviso to sub-section (6A) of section 206C

37J. The certificate from an accountant under first proviso to sub-section (6A) of section 206C shall be furnished in Form No. 27BA”

3. In Appendix-II to the said rules.-

(a) after Form No. 26, the following form shall be inserted, namely.

FORM No. 26A

[See rule 31ACB]

Form for furnishing accountant certificate under the first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961

I (name) _________________________ am the person responsible for paying (within the meaning of section 204) in the case of (name of the payer) ______________________ with PAN # (PAN of the payer) __________________________________________ and TAN (TAN of the payer) ______________________ located at (address of the payer) _______________________ ______________

I do hereby state that I, being the person responsible for paying had paid to/credited to the account of (name of the payee) _________________ a sum of _____________________ rupees without deduction of whole or any part of the tax

A certificate from an accountant certifying that the payee has fulfilled all the conditions mentioned in the first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961 is enclosed as Annex to this Form

I further state that the interest under sub-section (1A) of section 201 amounting to _______ rupees for non-deduction/short deduction of tax * has been paid by me the details of which are as under –

BSR Code/**24G Receipt Number (first seven digits of BIN) Challan Serial Number/**DDO Serial Number (last five digits of BIN) Date of deposit through challan/**date of transfer voucher

or

*has not yet been paid by me

Place Signature
Date Designation
# In case of Government deductor “PAN NOT REQD” should be mentioned

* Delete whichever is not applicable

** For payment made without the production of challan

ANNEXURE A

Certificate of accountant under first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961 for certifying the furnishing of return of income, payment of tax etc. by the payee

I/We *hereby confirm that I/we* have examined the relevant accounts, documents and records of (name and address of the payee with PAN) __________________________________________________ for the period ___________________ and hereby certify the following:

(i) ____________________ (payer) has paid to or credited following sum to the account of ________________ (payee) without deduction of whole or any part of the tax in accordance with the provisions of Chapter-XVII-B

Nature of payment Date of payment or credit Section under which tax was deductible Amount paid or credited Amount of tax deductible Details of amount deducted, if any
Amount deducted Date of deduction

(ii) The payee, who is a resident, has furnished his return of income for the assessment year ______________ relevant to the payment referred to in (i) above. The details of return of income filed by the payee are as under –

 

Date of filing return Mode of filingi.e.whether e-filed or paper return Acknowledgement number of return filed If paper return-designation and address of the Assessing Officer Amount of total taxable income as per return filed Tax due on the income declared in the return Details of tax paid

(iii) The payee has taken into account the sum referred to in (i) for computing his taxable income in return of income filed by him the details of which are as under –

Receipt on which Tax has not been deducted Head of Income under which the receipt is accounted for Gross receipt under the head of income under which the receipt is accounted for Amount of taxable income under the head of income under which the receipt is accounted for

(iv) It has been ensured that the information furnished is true and correct in all respects and no relevant information has been concealed or withheld

(v) Neither I, nor any of my partners, is a director, partner or an employee of the above mentioned entities or its associated concerns

I/we* fully understand that any statement made in this certificate, if proved incorrect or false, will render me/us* liable for any penal or other consequences as may be prescribed in law or is otherwise warranted

(Signature and Stamp/Seal of the Signatory)

Accountant

Place Name of the Signatory
Date Full Address
Membership No.
Notes:

1. *Delete whichever is not applicable

2.This certificate is to be given by –

(i) a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949); or

(ii) any person, who in relation to any State, is, by virtue of the provisions in sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), entitled to be appointed to act as an auditor of companies registered in that State

(b)after Form No. 27B, the following form shall be inserted, namely.-

—————————————————————————————————————-

FORM No. 27BA

[See rule 37J]

Form for furnishing accountant certificate under first proviso to sub-section (6A) of section 206C of the Income-tax Act, 1961

I. (name) ____________________ am the person responsible for collecting tax under section 206C in the case of (name of the seller/licensor/lessor) ________________________________ with PAN # (PAN of the seller/licensor/lessor) ___________________ and TAN (TAN of the seller licensor/lessor) ____________________ located at (address of the seller/licensor/lessor) _______________

I do hereby state that I, being the person responsible for collecting tax had received from debited to the account of (name of the buyer/licensee/lessee) _________________ a sum of _______________ rupees without collection of whole or any part of tax.

A certificate from accountant certifying that the buyer/licensee/lessee has fulfilled all the conditions mentioned in the first proviso to sub-section (6A) of section 206C of the Income-tax Act, 1961 is enclosed as Annex to this Form.

I, further, state that the interest under sub-section (7) of section 206C amounting to ____________ rupees for non-collection short collection of tax

* has been paid by me, the details of which are as under :-

BSR Code/**24G Receipt Number (first seven digits of BIN) Challan Serial Number/**DDO Serial Number (last five digits of BIN) Date of deposit through challan/* *date of transfer voucher

or

*has not yet been paid by me.

Place: Signature:
Date: Designation:
In case of Government deductors, “PAN NOT REQD” should be mentioned.

*Delete whichever is not applicable.

** For payment made without the production of challan by the Government deductor.

ANNEXURE A

Certificate of accountant under first proviso to sub-section (6A) of section 206C of the Income-tax Act, 1961 for certifying the furnishing of return of income, payment of tax etc. by the buyer/licensee/lessee

I/We* hereby confirm that I/we* have examined the relevant accounts, documents and records of (name and address of the buyer/licensee/lessee with PAN) ____________________ for the period _______________ and hereby certify the following:

(i) ______________________________ (seller/licensor/lessor) has received from or debited following sum to the account of _______________________ (buyer/licensee/lessee) without collection of whole or any part of the tax in accordance with the provisions of Chapter -XVII-BB

Nature of Receipt Date of Receipt or debit Section under which tax was Collectible Amount received or debited Amount tax collectible Details of amount collected, if any
Amount collected Date of collection

(ii) The buyer/licensee/lessee, has furnished his return of income for the assessment year _________________ relevant to the receipt referred to in (i) above. The details of return of income filed by the buyer/licensee/lessee are as under –

Date of filing return Mode of filingi.e.whether e-filed or paper return Acknowledgement number of return filed If paper return-designation and address of the Assessing Officer Amount of total taxable income as per return filed Tax due on the income declared in the return Details of tax paid

(iii) The buyer/licensee/lessee has taken into account the sum referred to in (i) for computing his taxable income in return of income filed by him, the details of which are as under:-

Payment on which Tax has not been collected Head of Income under which the payment is accounted for Gross payment under the head of income under which the payment is accounted for Amount of taxable income under the head of income under which the payment is accounted for

(iv) It has been ensured that the information furnished is true and correct in all respects and no relevant information has been concealed or withheld

(v) Neither I, nor any of my partners, is a director, partner or an employee of the above mentioned entities or its associated concerns

I/we* fully understand that any statement made in this certificate, if proved incorrect or false, will render me/us* liable for any penal or other consequences as may be prescribed in law or is otherwise warranted.

(Signature and Stamp/Seal of the Signatory)

Accountant

Place: Name of the Signatory:
Date: Full Address:
Membership No:
Notes:

1. *Delete whichever is not applicable.

2. this certificate is to be given by-

(i) chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949); or

(ii)Any person, who in relation to any State, is, by virtue of the provisions in sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), entitled to be appointed to act as an auditor of companies registered in that State.

 

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Verify TDS Deducted, Advance Tax Online Before Income Tax Return Filing

With just two weeks left to file the income tax returns, many taxpayers are busy making their final calculations, visiting their tax consultant and filling up the returns form. Before filing the tax forms, you need to deposit the balance tax due and interest, if any. This amount is based on your tax liability for the year, after taking into account advance tax paid and tax deducted at source.

Of late, the scope of tax deduction at source has been increased and includes salary, rent, interest, professional services etc. So, while preparing the tax returns and calculating the tax liability, you should take into account the tax amount already deducted on your behalf. Now, an easy way to do this is to refer to the 26AS statement. This statement is accessible on the NSDL site and is also available online on the websites of many banks.

According to a recent advice issued by the Income Tax Department, taxpayers should review their 26AS statements to check whether all the TDS deducted is appearing against their accounts or not. This would facilitate faster processing of refunds, if any.

Tax credit statement

The Income Tax Department facilitates a PAN holder to view its tax credit statement (Form 26AS) online. Form 26AS contains details of tax deducted on behalf of a taxpayer by deductors, details of tax collected on behalf of a taxpayer by collectors, and advance tax, self-assessment tax, regular assessment tax etc deposited by a taxpayers.

It also has details of refunds received during a financial year and details of high-value transactions involving shares, mutual funds etc.

A Form 26AS is generated wherever a valid PAN is furnished in a TDS statement.

Accessing Form 26AS

The tax credit statement (Form 26AS) can be accessed in these ways:

IT website

You can view your tax credit an https://incometaxindiaefiling.gov.in, and those who are registered on this site can view the Form 26AS by clicking on ‘View Tax Credit Statement (From 26AS)’ in ‘My Account’. The facility is available free of cost.

Bank website

You can view it on a bank’s website through the Internet banking facility. The facility is available to a PAN holder with an Internet banking account with any authorised bank. Form 26AS will be available only if the PAN is mapped to that particular account. The facility is available for free of cost.

TIN website

This facility is available to a PAN holder whose PAN is registered with the Tax Information Network to view of Form 26AS. The PAN holder has to fill up an online registration form for the purpose. Then, verification of the PAN holder’s identity is done by the TIN facilitation centre personnel either at the PAN holder’s address or at the TIN facilitation centre that has been chosen by the PAN holder. The verification involves a cost at the prescribed rate. Once authorised, the PAN holder can view his tax credit statement online here.

Credit confirms tax deducted

The credits in the tax statement confirm that:

The tax deducted by the deductor or collector has been deposited with the government The deductor or collector has filed the TDS/TCS statement accurately giving details of the tax deducted or collected on your behalf The bank has furnished the details of tax deposited by you accurately

TIN system

Every entity that has deducted or collected tax at source is required to deposit the tax with the government through a bank. A bank will upload this payment-related information in the TIN central system. The deductors are also required to file a quarterly statement with the TIN giving details of their TDS/TCS.

The TIN central system will match the tax payment related information in the statement with the tax receipt information from the bank. If they match, the TIN will create a comprehensive ledger for each PAN holder giving details of the tax deducted or collected on the basis of every deductor who has filed a statement.

In future, you will be able to use this consolidated tax statement (Form 26AS) as a proof of tax deducted or collected on your behalf, and the tax directly paid by you along with your income tax returns, after the need for submission of TDS/TCS certificates and tax payment challans along with income tax returns has been dispensed with by the Income Tax Department.

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