Refund Woes Continue
Apr 05, 2010
Many assessees are facing a typical problem with regard to the income tax refund due to them for AY 2008-09 and the problem is that they are not receiving the refund.
Mr. Ramesh, Director with X Pvt. Ltd. states that his accountants have done all that is required to claim a legitimate & valid refund but are still awaiting the clearance of the refund from the tax department.
Ramesh states that he was all the more hassled when the tax officers claimed that their system shows a refund of only Rs. 90,000 as against his refund claim of Rs. 500,000. This was despite the fact that his Company had done a complete reconciliation of the TDS certificates with the NSDL document “Form 26AS” that clearly states the TDS credit available to his Company.
The tax authorities on the other hand state that there is some glitch in their computer system and the full information as in the NSDL system is not being reflected to them. This issue is currently being investigated and accordingly the tax authorities have been mandated to issue refund only for such amount, the credit for which is available in their system.
NSDL authorities claim to have given the complete information to the central information technology cell at the Delhi office of the Income Tax Department (ITD) and claim that the issue lies with the tax authorities, who probably have not updated the system correctly.
With no real solution in sight, it is the assessee, who is to receive the refund, is the one who has to suffer the financial loss. With the government only being required to pay an interest of ½% per month on the pending refund, there seems to be certain questions that are unanswered;
1. Whether an assessee is statutorily required to fund the government?
2. Whether or not, the government is duty bound to release refund to assessee’s at the earliest?
3. Is it not wise for assessee’s to defer payment of advance tax & pay the correct tax with 1 month’s penal interest? This will eliminate the need for refund in the first place but the issue still is open for such assessee’s who have their tax recovered by way of TDS.
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