19 th May, ) Mr. Hasmukh Adhia Revenue Secretary Ministry of Finance New Delhi

Transcription

1 19 th May, ) Mr. Hasmukh Adhia Revenue Secretary Ministry of Finance New Delhi 2) Mr. Atulesh Jindal Chairman, Central Board of Direct Taxes Ministry of Finance North Block, New Delhi ) Chief Commissioner of Income Tax Aaykar Bhavan, M.K. Road, Mumbai Hon ble Sir, Re:(1) Forceful adjustment of refund due to the assessee against the alleged interest under section 234A and 234B of the Income-tax Act, 1961 ( the Act ); (2) Non-granting of credit for advance tax; (3) Non-granting of credit for tax deduction at source ( TDS ); (4) Short credit of TDS and advance tax; and The Chamber of Tax Consultants, established in 1926, is one of the oldest nonprofit associations of tax practitioners of Mumbai. Topmost tax Practitioners, Senior Advocates and Chartered Accountants have adorned the Presidentship of the Chamber. Today, the Chamber enjoys considerable goodwill and 1

2 respect not only among tax practitioners, Advocates, Solicitors, Chartered Accountants but also among leading corporate- who also are members of the Chamber. The Chamber also has created a niche with the government and other regulatory agencies, where representations by the Chamber are received with all seriousness. In the recent past the DelhiHigh Court in Court On Its Own Motion v. CIT (352 ITR 273) against the public interest litigation filed by one of the Chartered Accountants and against writ petition filed by All India Federation of Tax Practitioners with respect to: (a) (b) (c) (d) (e) the harassment faced by the assessees specifically the deductees on whose behalf the tax has been deducted by the deductor under the provision of the Act; non-disposal of rectification application; adjustment of demand for earlier assessment years against refund of current assessment year without following the procedure laid down under section 245 of the Act; granting of short credit of TDS, or non-granting of TDS either due to mismatch or non-complianceof the procedure under the Act by the tax deductor; and such other matters related to above. The Delhi High Court has admitted the public interest litigation as also the writ petition and have laid down the procedure as also given the directionsin the form ofline of action to be complied with by the Revenue so that the 2

3 various grievances put forward before the High Court can be resorted amicably and without any sort of harassment to various assessees. A question arises as to whether the decision of the Delhi Court is followed by the Tax Department in its word and spirit. Now, since last couple of years it has been experienced by our Members that the officers of Tax Department while preparing the tax computation pursuant to the assessment order under section 143(3) of the Act have not been granting the refund due to the various assessees by adjusting the said refund according to their own whims and fancies and also by misusing the power in the following manner: 1) Adjusting refund due to assessees by levying interest under section 234B of the Act even though no such interest is leviable on assessees. 2) Computing the interest under section 234B of the Act in an inappropriate manner and contrary to the provision of the above section; 3) Computing the interest under section 234B of the Act in a manner which is sometime more than the aggregate tax demand; 4) By levying interest under section 234A of the Act, even in case where assessees have filed the return of income within the due date specified under Explanation 2 to sub-section (1) of section 139 of the Act; 5) Granting of short credit of either advance tax ortds or non-granting of credit of such taxes which the assessee is entitled to even in the situation where such credit has been legitimately due to the assessee and reflected in Form 26AS, being document available from the web site of the Tax Department. 3

4 It is to be noted that when tax paid is more than the tax payable by assessees, the question of invoking the provisions of and levying interest thereunder does not arise. Similarly, where the return of income has been filed on or before the due date specified under Explanation 2 to sub-section (1) of section 139 of the Act, the question of invoking the provisions of and levying interest under section 234A of the Act does not arise. As a result of all the above practices followed by the officers of Tax Department, the assessees are not allowed refund which is contrary to the fact that such assessees are entitled to refund of excess tax paid by them alongwith interest under section 244A of the Act. On being conveyed about the above facts to the concerned assessing officers, the officers have directed to file rectification application. As a consequence, assessees have filed rectification application to get legitimate refund due to them. Needless to add, such rectification application leads to the involvement of valuable time and also cost to the assessees. In any case, the rectification applications are never given a priority. Representation is being made for Your Honour s kind attention, consideration and necessary action so that the practice followed by the assessing officers of the Tax Department can be prevented and assessees be granted proper tax credit available either on account of TDS or advance taxand can get the refund legitimately due to them without adjustment of the same against alleged interest under sections 234A or 234B of the Act or such other section under the Act which may be imposed on the assessee in order to adjust the refund. 4

5 We Trust initiation and impletion of necessary action would overcome the above situation as also is in the interest of large tax payers of the Countryand would retain, maintain and develop their confidence, faith and trust in the system by avoiding harassment and hardship to assessees. Thanking you, Yours Sincerely, For THE CHAMBER OF TAX CONSULTANTS AVINASH LALWANI PRESIDENT MAHENDRA SANGHVI CO-CHAIRMAN LAW & REPRESENTATION COMMITTEE 5