Implications of mentioning wrong section in TDS challan

The ITAT, Jaipur in the case of Income Tax Officer, TDS, Alwar vs. LIC of India , 2015 (10) TMI 2439 , has held that if an assessee makes an error in quoting section in his TDS challan and the challan is deposited with the bank, the assessee cannot retrieve the same and make any correction. In such a situation the assessee would not be allowed to rectify his TDS challan.

Common errors occurring in income tax challans:

The CBDT has observed that assessees often commit mistakes while filing their tax credit claims in the returns.

Such errors include:
A. quoting of wrong or invalid PAN or TAN;
B. quoting of only one TAN against many TAN tax credit;
C. providing information in wrong TDS Schedules;
D. furnishing wrong challan details in respect of Advance tax, etc.

Due to such mistakes, the tax credit cannot be allowed while processing returns. The CBDT desires the taxpayers to rectify if the demand for such incorrect details and file rectification requests with correct particulars for correction of their demands.

Provisions relating to rectifications of challans:

An Assessing officer has the power to rectify the challans. However such rectification can be done only twice subject to certain conditions.

To rectify an error in TDS challan, an assessee should apply before the Income Tax department (TDS ward) to rectify the same. Thereafter the same will be corrected by the ITO (TDS) Officer. But there is no provision of writing the correct TDS section in return to rectify the wrong one in challan. If the same is done, there will be a mismatch in the return.

The procedure of rectification:

To rectify the challan, after the window period available to banks for rectification, an assessee can write a letter requesting for correction before the assessing officer (TDS ward) having jurisdiction, who is authorized according to the departmental OLTAS application to correct any data of challan in genuine cases, to allow credit of the taxes paid to the said assessee.

Conditions:

The time window for correction by the bank is seven days from the date of receipt of request for correction from the assessee, subject to following conditions:
1. Correction of name is not allowed.

2. Correction of Minor Head along with the Assessment Year is not allowed.

Correction of PAN or TAN number is allowed only when the name in the challan matches with that of the new PAN or TAN.

The change of amount is allowed only if the amount is same as the amount actually received by the bank and credited to the Account of the Govt.

For a single challan, correction can be done only once. But in cases where the first correction request is made only for amount, the second correction request can be allowed for other fields.

However if any one of the requested changes is not allowed, the others are also rejected. In other words, partial correction is not permitted as far as the law relating to income tax is concerned.

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