While filing the Income Tax Return, the amount of TDS which was claimed during the previous year must be matched with the amount as reflected in Form 26AS.

While filing the Income Tax Return, it is important to consider the amount of TDS which is reflecting in Form 26AS and if such amount as filled in IT Return exceeds the amount as mentioned in Form 26AS , then Income Tax Department has a right to send notice under Section 143(1) of IT Act to raise demand of mismatched TDS along with interest under Section 234B and 234C.

Reasons for TDS not reflecting in Form 26AS

Now, the question arises as what are the reasons of TDS amount not reflecting in Form 26AS. Here are the few case where the amount of TDS do not reflects in Form 26AS:

1. Where the deductor has deducted the TDS but failed to file TDS return.
2. Where the deductor has deducted the TDS but filed incorrect TDS return.
3. Where while filing TDS return, deductor wrongly mentioned the PAN of deductee
4. Where while filing TDS return, TDS do not mention PAN of deductee

Therefore, it is needless to say that the above mentioned incorrect TDS return, the amount of TDS shall not be reflected in deductee’s Form 26AS.

In such cases, where TDS return has not been filed or incorrectly filed then in such cases deductee has an option to revise the TDS return and once deductee file the revised corrected TDS return then such TDS shall be reflected in Form 26AS of deductee.

Provisions of Income Tax Act does not bar deductor to file revised TDS return but such revision of TDS return may lead to serving an intimation notice under Section 143(1) for demand of tax.

Hereunder is an illustration showing, why the deductee may get intimation under Section 143(1)

As mentioned in the abovesaid table, TDS of Rs. 70,000/- was deducted by deductor but deductor, mistakenly, forgot to consider this TDS while filing his TDS return.

In this case, deductee should approach deductor to revise his TDS return. But, for instance, deductor could not revised TDS return before July 31, 2021 then deductee will be left with following options:

Option 1:

Deductee (assessee) file IT Return considering Rs. 7,00,000/- income on which tax liability shall be 54,600 and deductee claim refund of Rs 15,400/-  (Rs. 54,600 –  70,000). Here in this case, IT dept. may raise demand of Rs. 54,600, considering the fact that TDS is not reflecting in Form 26AS..

Here, in this case, the total cost to deductee shall comes out to be Rs. 70,000 (as such bad debts) plus 54,600 totalling Rs. 1,24,600.

Option 2:

Deductee (assesse) may consider Rs. 70,000/- as bad debts and file his IT Return considering Rs. 6,30,000 as his income and pay Income Tax of Rs. 40,040/-.

Here, in this option the total cost to the deductee shall comes out to be Rs, 70,000 plus Rs. 40,040 totalling Rs. 1,10,040.

In majority of the cases, assesse opt for Option 2 as it saves his money.

Why Assessee will be served Reassessment Notice under Section 148

The due date of filing of ITR is July 31, 2021 and deductor failed to revise TDS return before that. It is pertinent to note that revised ITR may be filed upto December 31, 2021.

Now, suppose deductor revises TDS return in the month of Non’22 (as there is no provision for expiry period of filing corrected or revised TDS return) by that time decuctee would not be able to revise his ITR for AY 2021-22 and the time limit for serving notice under Section 143(2) would have also been expired. But, as the deductor has revised his TDS return then such amount of TDS got reflected in Form 26AS of deductee which in resulted into an evidence for Income Tax Department for income escaping assessment.

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