Correlation of amount paid in TDS certificate and Income

[sujittalukder]

Dear Members,

Is there any correlation between the Amount Paid as shown in TDS certificates issued by deductors and the income as shown in the P&L account?

What to do in case reconciliation statement is asked to make by the department to deductee?

On the basis of discrepancy between the same, the department has issued reassessment Notice u/s 148 and that too after the expiry of 4 years but within 6 years?

Is there any case laws on the same issue.
Your cooperation will be of immense help to me.

Regards
Sujit Talukder

[ashutosh majumdar]

The co-relation between the income shown as having been paid to the assessee and the income offered by the assessee is very important. If the income has been short-offered, the onus is on the assessee to explain the discrepancy. In the event of failure, the AO can have reason to believe that income has escaped assessment.

Was a s. 143(3) order passed earlier. If so, were the facts (TDS certificates) brought on record during the assessment proceedings. If yes, you can argue that there was no failure on the part of the assessee and so the reopening is not valid.

Pl check the extent of disclosure because that is crucial.

[sujittalukder]

Thank you for the reply.
As you said the correlation is important. But in case where there are alrge number of certificates and deductors and various types of income are paid by them and also whre certain income is chargeable to tax and certain are not, it is possible to match Amount paid and Income shown in P&L a/c?
For eg., Rent is not subject to TDS upto Rs 180,000. No TDS on reimbursement like Electricity bill amount recovered from tenants, etc.
Can you throw some more light on it?
regards

[ashutosh majumdar]

The point is everything is reconcilable. If the receipts are different from the figures shown in the TDS certificates owing to the payer not deducting on certain amounts, then it is a simple matter of explaining that.

One really can't fault the AO for asking for the reconciliation and if that is not provided, an adverse inference can be drawn - unless of course, there are circumstances beyond your control that prevent the reconciliation.

[sujittalukder]

Thank you Mr Majumdar for the reply and guidance.
Regards
Sujit Talukder