Demand draft leading to income tax dispute.

shivalucknow (Querist) 19 January 2016 This query is : Resolved
Hi,

This may be not very peculiar case but one that has hit me hard and out of nowhere.

Case : I was in a consulting assignment in 2006-2008 and as there was no TDS deducted by my employer, I was paying my advance tax through Demand Draft in name of Income tax A/c through Allahabad Bank through a challan deposit process.

One such DD from AY2007, was not received by IT department and a notification of demand was sent to me in AY2015 as there was a refund in AY2015.

As the deposit was made in 2007, the deposit challan receipt is all worn( not legible) hence cannot help track the deposit.

Further points to note :

1. No notice was received by me from 2008-2015, otherwise I would have acted on it earlier.
2. A refund was processed in 2011 and no demand was raised then or any other years where I have been regular tax payer.
3. IT department has not been able furnish copy of original demand.

While I am trying to get the Bank Draft transaction details from my bank, I need advice on how to proceed further on this contentious issue as IT department is now expecting a huge amount after levying interest on the tax not paid.

While in hindsight I understand that I should have been more diligent with tax matters given that onus of any discrepancy is on us, I need expert advice on how to move forward.

Look forward to expert advice on this issue.

Any help and advice is much appreciated.

Regards/

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Guest (Expert) 19 January 2016
Dear Shiva,

To be frank, I have some doubt about the reality of problem, when the case is 9 years old and also you say that refund was processed in the latest year of 2015 by the IT Department, more so, especially when you have preferred to have a casual consultancy on this forum instead of running without delay to some local IT lawyer.

However, if there is your problem is real one, since your credit relates to approximately 9 year back, only your bank can help you, if they provide you detail of credit to the IT department and clearance of DD in their account. None else can help you at this juncture, unless credit is proved and DD is encashed by the bank. IT department is concerned only with the liability to be cleared by you or submit proof of credit to their account.

However, if bank has failed to show credit transaction in to account of the IT department, but has already encashed DD, you will have to hold the bank responsible and sue them in the competent consumer forum for failure of their service to you.

Rajendra K Goyal (Expert) 20 January 2016
Reply the notice through your tax lawyer / tax consultant on the facts.

Meanwhile collect necessary details from your Bank.