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From: Shamaa Khan <shamaaraat@gmail.com>
Subject: [aurangabad_ca] Adjustment of Tax Payment against interest & taxes.
To: aurangabad_ca@yahoogroups.com
Date: Tuesday, 16 March, 2010, 10:20 PM

 

Dear All,

1) Is it true that Income Tax Dept. first recover the interest u/s 234B,234C & 220(2) out of Regular tax paid ? the remainder amount shall be adjusted against outstanding Tax?

If it is so? is it justified? It is as good as interest on interest. which is undue hardship on assessees. It is like a Baniya Byaaj (like professional money lenders).

2) Also one more unjustified things. 1) The Rate of Interest u/s 234B, 234C & 220(2) is 1% pm where as Interest given to assessees u/s 244A is mere 0.50% PM.

3) The Govt. Feels that they have better earning ratio on funds then the assessees?

4) Whenever any deduction is allowable they use the term " Whichever is lower:" e.g. HRA u/s 10(13A) But wherever anything is taxable they use the term "Whichever is Higher" e.g. Annual value of house property.

5) Also when there is any outstanding demands pending of client & of the same client there are no. of applications u/s 154 is Pending for no. of years (Which they should sort out within 6 months) , The ITO doesn't bothers it but continues to add interestu/s 220(2) @1% pm till the assessee pays.

Is there nobody to question them why they are delaying indefinately in passing the 154 orders & issuing refunds alongwith 244A interest?

Why they doesnt clear their pending 154 lots before raising fresh demand on the same assessees?.

5) I am in this field since last 7 years & in 2 compaies where I worked so far I found that IT Dept. is very unorganised to keep track of refund of one year adjusted against demand of another year. And as a result sometimes they recover the same demand Twice/ even Thrice.

In final order they forgets to give credit for all the adjusted refunds. Unless the accountants/ tax experts of Client is careful there are all chances that the company loses money on this count.

Even after finding out, the IT people doesn't show any interest to look at the old files & 154 applications are mountaining like anything.

6) While calculating final refund after series of assessment orders of one particular year , they deduct full amount of "Refund already issued earlier instead of Tax element only "

(Excluding interest u/s 244A)

this is really unfair practice , as when they raise demand , they first recover their interest & then only adjust the balance amoun towards tax, but while issuing refund why reverse practice is followed?

Its really became a big headache for people like me who is working as Tax Manager & unable to get genine refund for my company & inspite of finding revenue recoverable figure of Crores of rupees (On-paper) , at the time of appraisal , sufferes as under performer ( as the refund not yet realized) .

Please if anybody knows any higher authority of Income Tax Dept. to resolve such a serious problem , kindly guide me so that I can fwd. this mail to him.

Its all like Damini's famous dialogue "Taarikh Pe Taarikh" & no Justice.

We should join the hands together & resolve this unjustified terms of the Govt.

Regds,

Shamaa.