Today we received Intimation u/s 143(1) for my wife from Income tax department for the year ended on 31-3-2008. Major source of her Income is salary and interest from deposits.
To our horror we noticed that although we had paid full tax (Advance tax, TDS deductions and Self Assessment tax) - she was served notice for payment for Income tax along with interest!!!
The delivery staff told me - "Do not worry, sir. There have been some doubts about TDS claims and as a precautionary measure department has not given credit of TDS. Ask your CA (Chartered Accountant) and show all original TDS certificates and you will get the correct order."
Upon simple inspection of the Assessment Order we noticed that except for the Returned Income figure none of the figures on the Assessment Order matched with the filed Return. Upon a short telephonic discussion with CA, we were advised to approach the Income Tax department directly - as there are too many such cases and they are unable to cope up!
Wonderful. Isn't it? Would any one care to join the party?
As far as TDS is concerned we poor citizens have no say. At the end of the year we collect the TDS certificate from the deductor; and claim credit while filing the Return. And we expect that it will go smoothly because TDS information is available online on Internet - for any one to see and check. But in India, it does not work that way.
What's the way out? Meet the CA or some tax expert personally, decipher every word written on the Assessment Order, write a letter to the Assessment Officer, submit it to the Assessing Officer - show original TDS certificates; and wait for the revised assessment order!
How a salaried class person is expected to do all this? Who will compensate citizens for all this un-necessary extra work?
I have never managed to understand rationale behind Tax Deducted at Source - particularly when we are regularly paying Income tax every year. If Government is not able to give credit for the collected TDS then it has no moral right to continue with the TDS collection.
I hereby urge every citizens of India to demand abolition of TDS. At least, it should be done for the regular tax payers.
What do you think?
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There is no logic at all in how the department functions. Years back got a refund cheque for 10000 odd in my Dad's name on the day before the cheque was to expire. Knowing well that the cheque will be invalid by the time it is presented, we wrote to the department officially with the instrument for revalidation. We have yet to hear from them leave aside getting back the money. So many such refunds must be lost in this quagmire of chai paani etc. and the department is sitting tight on all such things. TDS is another big scam. There is no means of ascertaining if the company or person deducting the amount is actually paying it to the government and the onus is always on us to prove that we are not wrong. (You dare not say I am right). Besides in business why are we forced to deduct and pay tax and all the umpteen returns? Isn't that the government's job? Or is the Govt. forcefully outsourcing it on our head with a noose that they can pull anytime? Questions, questions and more questions but no answer.
ReplyDeleteWell, now a days, after one time registration we are able to see all TDS amounts deducted from our payments and credited to our account online. Also, we get an e-mail from Income tax department with same details. At least, I have been getting it properly. This way, we are able to check whether the ddductor has really deposited money in our favour or not.
ReplyDeleteBut problem here is, Income Tax department does not want to trust such details!!! Isn't it ridiculous? It is time we all start asking questions to the people responsible for creating such a mess.
I too have received IT demands with interest for AY2008-09 two weeks ago, when I was expecting refund of excess tax paid. The IT authorities did not consider TDS and advance tax paid by me, which anyway are shown credited on NSDL/ OLTAS site.
ReplyDeleteI am curious to know whether your problem is sorted out? I have also been advised to go to Bandra Kurla office with TDS and advance tax proofs, but was wondering if sending those by post will work.
Thanks and regards,
AA
First we prepared a reply under Section 154 for Rectification. Our CA did not help us except to provide a draft letter written for some one else. So, we had to understand each and every item on the Order and compare it with the Return filed. Then which-ever item had mistakes we had to point it out.
ReplyDeleteAfter that we went to the BKC. We were told that counter is only for salaried people - you go to your accounts officer. Of course, my wife is having salary income but some unknown reason she was not enrolled there! So, we went to VASHI in person and handed over the letter along with copy of Form-16 & 12-BA, TDS certificates, Advacne tax & Self Assessment tax challans to Accounts Office.
Please note one is supposed to file reply under Section-154 within 1 month of receipt of order.
That's it. Whew! We are waiting now for something to happen from IT dept.
Today we received a notice u/s 142(1) to appear before AO.
ReplyDeleteThanks for the reply and the update. Hope this all will be sorted out soon for you. Regards, AA
ReplyDeleteHope the matter is now sorted out. Could you give details of the meeting with the AO? It may be helpful to many others. Regards, AA
ReplyDeleteAfter contacting our CA for the notice u/s 142(1) we realised that her case was taken up for scrutiny u/s 143(2) on 5-8-2009. And we had given written authority to our CA on 31-8-2009. After that we received this intimation u/s 143(1) on 29-4-2010 with demand to pay money - where TDS was not accounted properly along with other mistakes. Now, our CA is attending the hearing and has been asked to submit several documents. So, it's going on.
ReplyDeleteGood luck! Probably, same is in store for me! AA
ReplyDeleteNo body is there to listen. I hope FM may
ReplyDeletelisten such issues and give directions to
authorities under him.Instead of issuing notices
under this and that act.. they should write letters requesting to assessee to resubmitt the
revised return alongwith copy of documents in support...thats all....
Some time back, I received a notice from the Assessing officer of my wife that he wants all my details for last 3 (three) years to complete my wife's scrutiny u/s 133[6]! Reason for such demand is that my wife has made transactions with me! Only thing I could think was that all transaction we do - we have joint accounts and there are no cross transactions any where. For our own safety don't we all keep our bank accounts and property transactions in joint accounts? So, moral of the story is - if your case is taken up for scrutiny be prepared to show all your spouse's transactions to your wife's assessing officer.
ReplyDeleteAO of my wife has been satisfied with details given for my wife but now wants to check my details of Income. And believe me, my Assessing officer is just 5 meters away from my wife's Assessing Officer on the same floor. Can he not get my details from him? And out of 3 years details he is asking - 2 year's scrutiny assessment has been done and in spite of Assessment orders issued I'm still waiting for refund of the order of Rs.1 lakh from the dept. Of course, that's another story.
My self and my wife went 2 weeks back to meet this Assessing Officer of my wife. Clerk there was very sympathetic. He said why don't you come in Oct - currently we are busy issuing notices for scrutiny assessment. When we asked him about one Refund cheque that had not been delivered to us - he checked and said that it was not delivered and we should give written application giving new address. We wrote the application and gave it him. After accepting it, he said refund will not be issued because as per records about 20,000 is to be paid by my wife to IT dept for next year and 80,000 demand is already given for year after next. We pointed out to him saying we have NEVER received any notice for demand of Rs.20,000/- and for 80,000 we have already filed reply under section 154 and that assessment is under scrutiny. He said any way our rule is not to refund money if any demands are pending!!! And if you have not received any demand for Rs.20,000 then write letter to the Assessing Office in Oct 2010.
I recently got my refund for AY 2008-09. Although mine was not the case of a scrutiny call, I thought of putting this information on your blog for the benefit of others who might come here by internet search. As I wrote earlier, I had received IT demands with interest as no cognizance of TDS and advance tax was taken. I wrote a letter to the assessing ITO attaching proofs of tax payment and sent the same by speed-post AD. As AD was not received in three weeks or so and I remembered your advise of filing reply to demands within one month, I sent a colleague personally to BKC. He was referred to some upper floor, where they put seal on the copy of my letter. I got the refund in 3-4 months. Later the acknowledgment from post also came!!
ReplyDeleteGood luck to you for settling of your IT problems soon.
Regards,
AA
My wife received a letter in November from AO asking for details of investment done on 3-March 2008 of a particular amount. We checked our records, it was an investment done by me, with my wife as a joint holder. But this investment was done on 31-March 2008.
ReplyDeleteSo, I talked to our CA. They decided to write a letter saying possibly Mutual Fund has mistakenly reported wrong date in AIR. Also, I learnt that as per recent clarification by Income tax department (F.No.225/26/2006-ITA.II (Pt.) - dated - 08-09-2010) - for scrutiny case based on AIR - scrutiny would be limited only to the aspects of information received through AIR.
On 25 Nov 2010 I visited AO along with CA. I told AO that as a matter of good practice we always do all investment in joint names; also we have bank account in joint names. And we ensure that we don't do any cross transactions. We are highly educated people with clean track records. Keeping this in view, if he can ask for specific details from me instead of asking for so many details for last 3 years. It would be very time consuming for me to provide the same; as my two year's scrutiny assessment for the same period is already over and files are closed. He said I may not give certain information saying 'Not applicable'. I asked him how can I decide what information to give - instead it would be better if can ask for specific information. He declined to do the same.
Also, I pointed out to him that as per the recent circular - AIR cases should be limited to aspects of information received through AIR. He said he is within limits for asking any information from me because this circular is for assessee only i.e., my wife's case only; and it is not for any third party - who has been called to furnish information u/s 133[6].
After that he got bit upset and said he could have even included clause for penalty if I had failed to provide information sought by him; and refused to take my presence on record and also refused to accept clarification letter regarding wrong date filed by Mutual Fund in AIR - written by CA giving weird excuse. He said my wife should give affidavit saying she has not done any investment on 3-March 2008. He informed us that he has written to the Mutual Fund on 4-Nov but so far he has not received any reply. He said take your own time and give him information he has asked for and he refused to give new date. He said come whenever you have information. And we left his office with a heavy heart.
Yesterday (1-1-11) we received assessment order by Speed-Post for my wife's scrutiny case saying 'nil' demand. Phew!
ReplyDeleteOn 30th Nov I contacted Mutual Fund. It was a call center number. I asked them if they had replied to the letter written by AO. They had no idea about issues related to AIR. After some follow-ups they said they had prepared the reply saying that since it was NFO (New Fund Offering) investment was credited to the applicant's account on 31-3-2008. I explained to them that this reply won't satisfy AO - as his question is different; AO wants to know if I had done investment on 3-Mar or not. If no then what it was reported by them in AIR. They prepared another reply and read it to me. I found it OK since it said that they had made mistake in reporting date in AIR. I asked for a copy of the same. They refused saying it was confidential and they can't share it with the investor; but I can officially put a query and they will reply to me.
So, I sent an email to Mutual Fund on 1-Dec. After lot of argument and several phone calls they prepared a reply to my request. It was wrong in a major way because it said that I was second holder! I pointed this out and then again after lot of arguments we did not seem to go any where. Upon request to talk to the supervisor and several calls I talked to a person who was totally unwilling to commit any deliverable. So, I asked him name of his superior. He claimed that he is Manager in charge and he does not have any one above him. I asked him name and contact of Mutual Fund to whom he is reported. He refused to give any information!!!
Outsourcing of customer service is such a bad idea for any service that requires human understanding. Outsourced people are only good for reading out information visible on the screen. They are unable to interpret or understand the context in which they are contacted. Also, they don't allow customer to go beyond them.
So, I searched a bit and found name and contact number of the Investor Relations Officer. The letter was signed by her and her contact details were there in the letter. I contacted her. She apologized for the mistake and response by the call center people; and quickly prepared a properly written letter admitting their mistake in reporting wrong date in AIR and giving details of my investment.
After receiving this letter, I met AO along with my CA. He said he has received reply from the mutual fund. We submitted details of all bank transactions for 2007-08 along with a letter. And this meeting was uneventful. He said he will prepare the order before end of Dec.