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26AS provide details of tax deducted or collected at source for the information of the taxpayer. In preparing return of income he is expected to visit this form and match them with his books of account and bank statements. Here is a typical case of 44AD contractor in which the taxpayer/contractor disputed the assessment framed on the basis of certain entries of tax deductions showing in his 26AS which according to him did not pertained to him. The parties who claimed to have deducted tax however directly confirmed to the tax officer of payments made and taxes deducted in this case with copies of form 16A. However no agreements were shared. The assessee prayed that details of payment, mode of payment and date of payment and agreements may be called for from the above parties which did not happen as according to the tax officer, the Commissioner , the High Court and the Supreme Court, the assessee himself admitted never to have maintained any books to show otherwise having no such receipts showing in his books. This deadlock lead to addition in this case having been confirmed by the High Court as well as by Supreme Court in [2023] 459 ITR 364 (SC). This case is a direct pointer to the following : 1. In case of any 26AS mismatch the taxpayer must raise a complaint upfront ; 2. Even if regular books are not required under the law the taxpayer should maintain bank statements and agreements/contracts and with parties. In this case the Assessee followed revision route instead of appeal route thus depriving himself of remedy available at the income tax appellate tribunal forum . This case also raise a pertinent question whether 26AS /third party borne information of summary transactions could solely be the basis for making assessment of income without gathering direct source evidence in the form of agreements , invoices , bank statements etc.

 

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