QUESTIONS & ANSWERS
Delayed refunds: need for change in mindset
I am yet to get a refund of about Rs. 20,000 notwithstanding the fact that I have filed the necessary certificates of tax deduction. After repeated reminders, I have been given an undated printed communication from the Directorate of Income-tax (Systems) from which it is clear that it is a routine reply sent to refundees like me. I am enclosing the same, so that you can highlight the unreasonableness of expecting the refundees to “persuade” the deductor to report the tax deduction without the deficiencies, which have been assumed in the response. Such persuasion should be effective, if undertaken by the TDS section of the Income-tax Department. It is clear that there is no intention to give the refund without matching credit available from the report of payment from the deductor with the correct PAN. Refunds of most senior citizens, who have no means for persuading the deductors, which are usually banks, is a matter which should be taken up by the Income-tax Department.
There is also an advice that any assessee can view the tax credit in the web screen with one time registration. It is further advised that a complaint to the National Securities Depository Ltd. (NSDL) with the envelope marked 26AS can be sent in respect of current deductions, if credit is not shown in the screen.
Where the deductor fails to discharge his responsibilities, the deductee can do hardly anything even by noticing that there is no matching credit. Failure or delay in giving refunds would only amount to harassment. The law does not require that the person should not only get the tax deduction certificate and file the same but also ensure the deductor to send information of matching credit to the Income-tax Department. It is necessary that you should highlight this unreasonable attitude of the Income-tax Department in The Hindu.
The reader, K. P. Mahalingam, Chennai, correctly understands the communication from the Directorate of Income-tax (Systems), which disowns all responsibilities for delay by attributing it to deductors. The law as answered in The Hindu dated June 8, 2009, is that it is for the assessing officer to verify the deposit with the deductor. The assessee should get his refund, wherever he proves deduction. But the Directorate of Income-tax (Systems) as well as Circular No. 2 of 2009 dated May 21, 2009, have both understood “In the context of TDS, the first best principle is that no claim for TDS/ TCS should be admissible unless the deductor/ payer has paid the amount so deducted/ collected to the credit of the Central Government and the information relating to the transaction is received”.
This is a wrong understanding of law and is hardly justified on any reasonable ground. The deductees are helpless in ensuring compliance on the part of the deductors. Outsourcing the accounting of tax credits to NSDL can hardly improve the matter as long as there is no enforcement of compliance on the part of the deductors or recognition of right to tax credit irrespective of any non-compliance of deductors as long as there is proof of deduction. If this is not done, the reader is right that there will be continued “harassment” for all refundees, who are unfortunate enough to have tax deducted for more than what is required to be paid. Change in the mindset of tax administration in this regard is urgently required.
S. RAJARATNAM
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