Situation:TDS deducted from Salary but not paid to Central Government by Deductor due to which TDS Certificate was not issued.Assessing Officer (AO) had demanded such Tax from t employee irrespective of default from employer for non deposit of TDS.Please suugest whether AO is right for such demand?
hiii Nishant The AO is right for such demand. If the employee is shown TDS on salary in his IT return and this is not matched with the IT system (26AS) than the AO can send a demand letter or a notice under saction 143 (1) to the tax payer (so called employee) but the AO also send a notice to employer asking that the taxpayer is shown TDS on salary received from you (emloyee). If taxpayer is right than please deposit such TDS and upload the TDS rerturn. Againg the taxpayer has to show the proof of TDS dedected on salary to AO. I have already face the same situation.
Depositing tax with ITD is the responsibility of employer.but AO is justified here because he doesn't have and proof of your TDS deduction.you must produce other proof.and even if refuse to accept then AO is not justified.
I am Writing this Answer with reference to **Non-Deposit of tax deducted at source - Instruction No 275/29/2014-IT-(B), dated 01-06-2015 -** In this circular CBDT has mentioned that as per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per Section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter- XVII,so accordingly if there is tax payable due to mismatching of TDS due to non deposit of TDS by deductor,demand can not be raised from deductee/Assessee. **Therefore if employer not paid TDS then you can file petition with TDS Officer and they will recover from deductor , while filing petition be sure to attach all supportings llike bank statement , salary slip , TAN of Employer etc.**
Hie Nishant. AO is right for the demand because as per Section 192, once TDS has been deducted from salary then it has to be paid to the CG. Though mistake is of employer, but AO demand from employee is justified.
Dear Nishant, Action of Assessing Officer justify if you have no proof of such TDS deduction. you can provide other proof of tds deduction like Salary slip ( salary slip clearly shown tds deduction), you can produce appointment letter along with offer letter and bank statement which is clearly shown TDS deduction. If you are failed to prove TDS Deduction than you liable to pay tax however if you produce other document and still AO demanded tds certificate and not accept other document than the action of AO is not justify. Any other query feel free to contact us Writer CA Chitranjan Agarwal