In a recent ruling, the Madras High Court directed the Income Tax Department to refund the differential amount within two months in a dispute where the department had failed to grant the full TDS credit claimed by the petitioner. Vajra Global Consulting Services LLP, the petitioner filed a writ for rectification and refund concerning TDS (Tax Deducted at Source) credit discrepancies. The petitioner claimed a TDS credit of Rs. 18,53,863 in their tax filings. Get a Handbook on TDS Including TCS as Amended up to Finance Act 2024, Click Here The Income Tax Department credited only Rs. 10,88,863, resulting in a shortfall.

An additional TDS amount of Rs. 7,65,000, deducted by Richfeel Health and Beauty Private Limited, was not initially reflected in Form 26AS at the time of filing the return. After the return was filed, the additional TDS of Rs. 7,65,000 was updated in Form 26AS but the respondents did not credit it to the petitioner’s account. Despite filing a rectification petition, the petitioner was informed that no further payment was due, which led to the writ petition. Aggrieved, the petitioner approached the Madras High Court.

By submitting the Form 26AS records, the petitioner’s counsel argued that the uncredited amount of Rs. 7,65,000 should rightfully be refunded to them, as it was withheld without justification after the updated Form 26AS verification. Get a Handbook on TDS Including TCS as Amended up to Finance Act 2024, Click Here The respondent’s counsel acknowledged that the petitioner was not credited with the full TDS amount of Rs. 18,53,863. Justice Senthilkumar Ramamoorthy observed that documentary evidence, particularly Form 26AS, supported the petitioner’s claim of Rs.18,53,863 in TDS. Since the respondents had credited only Rs. 10,88,863, the court observed that the petitioner was entitled to a refund of the differential amount of Rs. 7,65,000.

Get a Handbook on TDS Including TCS as Amended up to Finance Act 2024, Click Here Therefore, the court quashed the impugned orders and directed the respondents to refund the differential amount of Rs. 7,65,000 to the petitioner. The court mandated that the refund process to be completed within two months from the receipt of the order copy. Thus, the writ petitioner was allowed. To Read the full text of the Order CLICK HERE