No Demands from Assessee where TDS not deposited by Deductor: CBDT

CBDT reiterates non-enforcement of recovery of demand against the assessee where tax has been deducted but not deposited by the deductor

The CBDT has recently instructed the field offices that taxpayers, whose tax has been deducted at source but not deposited to the Government’s account by the deductor, will not be asked to pay the demand to the extent tax has been deducted from his income.

A CBDT communication to this effect was originally issued on 01.06.2015 to put an embargo on direct demand against the assessees in cases where the tax demand is on account of tax-credit mismatch mainly due to non-payment of TDS to the Government account by the deductor. However, it has been brought to the notice of the CBDT that these directions are not being strictly followed by field offices.

Therefore the CBDT has issued an Office Memorandum dt. 11 March 2015 reiterating the contents of the above-said communication dt 1st June 2015 and it has been reemphasized that the assessing officers shall not enforce demands created on account of mismatch of credit due to non-payment of TDS amount to the credit of the Government by the deductor.

CBDT Press Release dt 11th March 2016