CBDT Directive Regarding Grant Of TDS Credit In Mismatched Cases

Pursuant to the judgement of the Delhi High Court in Court on Its Own Motion vs. UOI 352 ITR 273, the CBDT has issued Instruction No. 5/2013 F.No.275/03/2013-IT(B), dated 8.07.2013 stating that when an assessee approaches the AO with requisite details and particulars in the form of TDS certificate as evidence against any mismatched amount, the AO will grant credit of TDS to the assessee after ascertaining whether the deductor has made payment of the TDS to the Government.

Instruction No. 5/2013 F.No.275/03/2013-IT(B), dated 8.07.2013

1. The CBDT issues instructions with respect to processing of Income-tax returns and giving credit for TDS thereon in the case of TDS mismatch. A few of the instructions on this subject issued in previous years are Instruction No. 1/2010 (25-2-2010) for returns pertaining to A.Y, 2008-09; Instruction No. 05/2010 (21-7-2010), Instruction No. 07/2010 (16-8-2010) and Instruction No. 09/2010 (9-12-2010) for returns pertaining to AY. 2009-10; Instruction No. 02/2011 (9-2-2011) for returns pertaining to A.Y. 2010-11; and Instruction No. 1/2012 (2-2-2012) and Instruction No. 04/2012 (25-5-2012) for returns pertaining to A.Y. 2011-12. The instructions gave decisions and the manner in which the TDS claims were to be given credit while clearing the backlog of returns pending processing. In the cases that did not fall under the specific TDS amount limit or refund amount computed, the residuary clause in these instructions gave the manner of processing those returns and it stated that “TDS credit shall be given after due verification“.

2. The Hon’ble Delhi High Court vide its judgment in the case Court On its Own Motion v. UOI and Ors. (W.P. (C) 2659/2012 & W.P. (C) 5443/2012 dated 14-3-2013) has issued seven mandamuses for necessary action by Income-tax Department, one of which is regarding the issue of non-credit of TDS to the taxpayer due to TDS mismatch despite the assessee furnishing before the Assessing Officer, TDS certificate issued by the deductor.

3. In view of the order of the Hon’ble Delhi High Court (reference: para 50 of the order); it has been decided by the Board that when an assessee approaches the Assessing Officer with requisite details and particulars in the form of TDS certificate as an evidence against any mismatched amount, the said Assessing Officer will verify whether or not the deductor has made payment of the TDS in the Government Account and if the payment has been made, credit of the same should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS with the relevant AO (TDS). The AO may also, if deemed necessary, issue a notice to the deductor to compel him to file correction statement as per the procedure laid down.

4. Thus, the manner laid down by the Hon’ble HC in the above mandamus may be one of the method of due verification as mentioned in the various instructions referred in para (1) above.

5. This may be brought to notice of all Officers working under your jurisdiction for compliance.

13 comments on “CBDT Directive Regarding Grant Of TDS Credit In Mismatched Cases
  1. vswami says:

    WRT the Post by Suresh Chandra Padhi, who says:

    “Many Govt. Departments, including Treasuries and Banks deduct TDS but do not deposit or upload the amounts in the IT Website so such amounts are not reflected in 26AS”

    In an ATTEMPT to provide a reply:

    Compliance with the TDS requirement rests wholly and exclusively with the payer of ‘income’; who acts as ‘agent’ of the Government for collection at source and is obligated to pay it over to the Government . That such is the correct position in law is squarely borne out by Sec 205 of the IT Act. And denial of credit for any reason whatsoever and a demand or adjustment of refund against such a demand is in blatant violation of the law. Further, in the light of, and after the issue by the Del. HC of, the writ (of Mandamus) any demand raised without allowing credit for TDS as claimed in the tax return, particularly e- filed, – or adjustment of such a demand against a refund due- will prima facie be in blatant violation of the law, besides being tantamount to a contempt of the court.

    The ridiculous situation and hardships faced with and grieved about, as is to be guessed, has arisen mostly because of the CPC, instead of being confined to the work of processing of e’ filed tax returns as originally intended, also is obligingly engaged in the work of collection of taxes in cases of manually filed tax returns and Intimations sent in respect of manually and / or paperless returns filed as per the erstwhile procedure.


    BACK / OVER to….

  2. Many Govt. Departments,including Treasuries and Banks deduct TDS but do not deposit or upload the amounts in the IT Website so such amounts are not reflected in 26AS and demands are again sent by the IT Dept after a long gap of ten years or more putting asssesses in great difficulty.Na action is taken against such Deductors even after submitting Form 16.

  3. ss says:

    Refund are generated through ITD System. Since the TDS credit appearing in Orders are not shown in ITD System this results into demand/short refund. How come the tax officer give credit of TDS in system so that assessee gets the full credit of tds. is there any procedure of dummy TAN against with tax officer can credit entire tds for assessee if yes please reply

  4. Awadheshprasad says:

    Is it mandatory to submit my original TDS or attested copy of my T D S?

    • vswami says:

      If reference is to a ‘paperless tax return’ filed or to a e’filed tax return, to one’s limited knowledge,filing of a TDS certificate or a copy of it with the tax return is well nigh impossible !!! < Any different view conceivable ?

  5. udayan dasgupta says:

    The problem is that, there are numerous instances where (i) the person responsible for making payments ie. DEDUCTOR , has deducted the tax under Chapter XVII , deposited to Govt. A/c , but has not uploaded the necessary return of TDS , and ( ii ) in some cases the TDS amount so collected has not been deposited to the credit of the Central Govt.at all , which means the deductor has enriched himself with Govt. money and the PAYEE is made to suffer, even though Form 16/A is issued.

    The first nature of default may be pardonable with interest and penalty u/s 201 of the Act’61, but the second nature of default is criminal in nature, and proceedings u/s 204 ( Chapter XVI ) of the Code of Criminal Procedure , 1973, should be commenced , by issue of summon from magistrate court against the DEDUCTOR .
    If the department takes initiative and lays down a few practical examples, everything will fall into place automatically.

  6. Narendra Modi says:

    Few years ago CBDT directed the ITOs that credit of TDS should be given on the basis of original Form 16A if the TDS amount is below Rs.25000.00 and that move/direction was like a cool breeze & give some relief to the taxpayers. now a days not a singe paisa credit is being given without justification of data of 26AS. You can see thousands of taxpayers wandering everyday, every city in local IT offices. Govt. should feel their pain.

    • Pkjain says:


  7. Ramesh says:

    why not the department takes action against the willful defaulters who deducts the tax and do not deposit the amount to the credit of the govt account or files wrong quarterly e-tds statements.

  8. Saroj Parida says:

    1. What if the Govt deducted TDS while paying its vendor & does not deposit & file the TDS return pertaining to 2007-08,2008-09,2009-10 & 2010-11
    2. How to make accountable to Govt department to revise their return with the correct data .
    3. Can I request the income tax dept to give direction to Govt to provide the details of TDS credit to be given to the Vendor .
    4. if there is any othe rmethod , kindly provide the same .



  9. DEEPAK SONI says:

    All the directions issued by the CBDT smack of arrogance and several ifs and buts which create more nuisance for the assessees and never allow any relief in the true sense.The citizens of the country who have been making payment of taxes are entitled to respectful treatment by the Govt as against which they always have to face the humiliation by the powerful and corrupt Govt employees.The promises like ciculars ,citizens’ charter are intended to be fool the people of the nation who relying upon the paper promises roam around the Govt offices for the due relief but ultimately realize that it wastage of the time,money and their respect

  10. thampy says:


  11. I.S.verma says:

    What if the deductor has not paid the amount of TDS (after deducting the TDS from the the payments made to the payee or credited to the payee’s account), in the Govt’s account?

    When th lawis clear that the payee should not be denied the credit for TDS for failure of the deductor to deposite the TDS in Govt’s account, then why such instructions?

    Instruction no.5/2013 do not satisfy the required compliance to the Court’s decisions.

    Will the Hon’ble Court and the CBDT (also) take note of the same and make the necessary amends?

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