Refund Rejected Due to 26AS Mismatch?

Allahabad High Court Clarifies the Law:-

A recent judgment of the Allahabad High Court (08 Oct 2025) has brought significant relief to taxpayers facing refund rejections due to Form 26AS mismatches.

Case Snapshot:

A taxpayer claimed a refund of around ₹1.5 crore, backed by TDS deducted under Section 80P.

However, the Income Tax Department rejected the claim solely because the TDS amount was not fully reflected in Form 26AS despite the taxpayer producing a valid Form 16A.

High Court’s Clear Stand:—

The Court categorically held that:

✔️ If a taxpayer can prove that tax has actually been deducted,

❌ The refund cannot be denied merely due to a mismatch in Form 26AS.

Key Observations:

- It is the Assessing Officer’s duty to verify discrepancies with the deductor and TDS authorities.

- A taxpayer cannot be penalized for mistakes committed by the deductor.

- Genuine refunds must be issued once tax deduction is established.

Why Do 26AS Mismatches Happen?

Most commonly due to:

- Deductor failing to deposit TDS

- Incorrect or revised TDS returns filed by the deductor

In such cases, the fault lies with the deductor not the taxpayer.

Practical Takeaway:

Always preserve:

- Form 16A

- Bank interest certificates

- Confirmation statements & bank records

These documents can decisively protect your refund rights.

Why This Judgment Matters:-

This ruling reinforces a crucial principle:

Substance prevails over technical errors.

If tax is genuinely deducted, a refund is a legal right, not a favor.