What if not file Statement of TDS within Prescribed Time
Charge of TDS recovered
Section 200 (1) of the income Tax Act, 1961 (‘Act’ for short) provides that any person deducting any sum in accordance with the foregoing provisions of bankruptcy XVII shall pay in the prescribed time, the sum so deducted to the credit of the central government or because the Board directs.
Submitting of statement for TDS deducted
segment two hundred (three) of the Act offers that any individual deducting any sum on or after the 1st day of April, 2005 according with the foregoing provisions of this bankruptcy or, as the case can be, any character being an organization noted in sub-phase (1A) of section 192 shall, after paying the tax deducted to the credit of the relevant government within the prescribed time, put together such statements for such period as can be prescribed and supply or motive to be introduced to the prescribed income-tax authority or the man or woman legal by means of such authority such declaration in such form and confirmed in such manner and putting forth such details and inside such time as may be prescribed.
Rule 31A (2) prescribes the time restriction for filing the said assertion. The statements are to be filed in every sector as unique beneath-
For length from April to June – 31st July of that financial yr;
For period from July to September – thirty first October of that monetary 12 months;
For length from October to December – 31st January of that economic 12 months;
For period from January to March – thirty first can also of the following financial yr.
Rectification of statement
The proviso to segment 200 (three) offers that the individual may supply to the prescribed authority a correction declaration for rectification of any mistake or to add, delete or update the information supplied within the statement introduced below this sub-segment in such shape and demonstrated in such way as may be distinct through the authority.
Penalty for non submitting of TDS statement
segment 272A(2)(ok) of the Act gives that if any person fails to deliver or reason to be added a duplicate of the declaration within the time specified in phase two hundred (3), then penalty of ₹ one hundred shall be paid for each day for the duration of which the failure maintains provided that the amount of penalty for disasters with regards to a announcement made below section 2 hundred(three) shall not exceed the quantity of tax deductible or collectible because the case may be. section 272A(four) offers that no order beneath this section will be passed by any profits tax authority except the individual on whom the penalty is proposed to be imposed is given an possibility of being heard within the depend through such authority.
Scope for submitting statements
The maximum crucial goal of the tax deducted at supply provisions is to increase the reach of the income tax department as a way to make tax management extra powerful and green and to lessen possibilities for tax evasion which will bring equity in the device. To acquire this objective, man or woman/s in every corporation, who is responsible to make sure bills required to deduct tax at supply on or before making such charge and furnish e-TDS quarterly statement on-line before the NSDL on quarterly foundation. Such provisions help in attaining the above said goal via non intrusive approach and for that reason improve tax compliance and collection. Deduction of tax at supply provisions not most effective increases the reach of the department however additionally leads to advent of an audit path that may be utilized as an effective tool towards detection of tax evasion. for this reason, in case of non compliance of tax deducted at supply provisions, stringent motion is integrated in the earnings tax regulation. Penal provisions are part of tax laws and they differentiate between those who pay the taxes and adhere to tax laws as towards folks that do no longer. for that reason, it now not best brings equity within the tax system but additionally as an effective deterrent towards viable tax evasion.
In ‘Rashmikant Kundalia V. Union of India’ – 2015 (2) TMI 412 – BOMBAY excessive courtroom the excessive court held that it isn’t always in dispute that as in line with the prevailing provisions, a person responsible for deduction of tax is needed to supply periodical quarterly statements containing the information of deduction of tax made at some stage in the quarter, by the prescribed due date. surely, delay in furnishing of tax deducted at source returns/statements has a cascading effect. beneath the earnings Tax Act, there’s an responsibility at the earnings Tax branch to process the income tax returns within the exact period from the date of filing. The department cannot accurately manner the go back on whose behalf tax has been deducted till statistics of such deduction is supplied by the deductor inside the prescribed time. The timely processing of returns is the bedrock of an green tax administration gadget. If the profits tax returns, mainly having refund claims, aren’t processed in a timely manner, then-
delay takes place inside the granting of credit score of tax deducted at supply to the character on whose behalf tax is deducted and consequently ends in postpone in issuing refunds to the deductee, or elevating of infructuous demands towards the deductee;
The self assurance of a wellknown taxpayer at the tax administration is eroded;
the past due fee of refund influences the government financially because the authorities has to pay interest for postpone in granting the refunds; and
the delay in receipt of refunds consequences into a coins drift crunch, especially for enterprise entities.
trendy case regulation
In ‘Raja Harpal Singh Inter college V. main Commissioner of profits Tax’ – 2016 (5) TMI 1109 – ALLAHABAD high courtroom the Assessing Officer, on going through the information of the appellant detected that the appellant had did not supply e-TDS quarterly statements on line for the evaluation years from 2008 – 09 to 2012 – thirteen and had therefore violated the provisions of segment 200(3) of the Act. The Assessing Officer issued notices to the appellant. notwithstanding the difficulty of note the appellant had neither appeared on the date of listening to nor furnished any clarification. A very last possibility become provided in which it turned into indicated that the penalty order might be passed on the premise of the substances to be had on document by means of treating that the appellant widespread the default and that it had no explanation to offer. The appellant engaged an advise. The suggest seemed at the listening to but did now not furnish any affordable purpose for no longer submitting e-TDS statements or any reason behind waiver of penalty. He looked for an adjournment which changed into granted. Even on the adjourned date no respond changed into submitted. Later the appellant submitted a letter, dated 16.01.2013 in which it was referred to that the normal fundamental had joined the college on 21.01.2010 and he became accumulating the vital papers and that there has been no aim to violate any provision of regulation. The appellant searched for one month time for submitting e-TDS statements. The appellant but did now not supply any reason for the put off in submitting the statements. The appellant filed e-TDS statements on 08.02.2013 and 09.02.2013. The Assessing Officer found that no reasonable purpose were proven via the appellant for now not submitting the e-TDS statements inside the time restrict prescribed and because it changed into set up that the deductor had violated the provisions of phase 200(three) of the Act, the appellant turned into treated as an ‘assessee in default’ and a penalty under section 272 A(2)(ok) of the Act on the charge of ₹ one hundred in step with day became imposed.
in opposition to the order of Assessing Officer, the appellant filed attraction before Commissioner (Appeals). The Commissioner (Appeals) referred to that there has been no regular incumbent protecting the rate of most important due to the fact that 30.03.2006 until the brand new major become appointed with impact from 25.01.2010. The Commissioner (Appeals) taken into consideration that the appellant was avoided with the aid of sufficient reason to document the e-TDS statements relating to the economic years 2007 – 08, 2008, 09 and 2009 -10. Even after the appointment of everyday main, the appellant didn’t report e-TDS statements. The Commissioner (Appeals) modified the order of the Assessing Officer that the penalty will be imposed with effect from 01.04.2010 to the date of submitting go back. The penalty for the economic years 2010-eleven and 2011 -12 is to be computed from the due date of submitting to the date of returns were genuinely filed.
against this order the appellant filed attraction earlier than the Tribunal. The Tribunal dismissed the attraction upholding the order of Commissioner (Appeals), who reduced the penalty. towards which the appellant filed the existing enchantment earlier than the excessive courtroom. earlier than the high court, the appellant submitted the subsequent contentions-
for implementing penalty, good enough possibility became required to be supplied as is contemplated under phase 272A(4) of the Act;
it can’t be stated that possibility become supplied to the appellant to furnish an explanation when you consider that no respond was despatched to the college in reaction to the software dated sixteen.01.2013;
despite the fact that no explanation has been provided to the Assessing Authority enough explanation have been provided before the first appellate authority for now not furnishing e-TDS statements in time;
the reason has now not been taken into consideration in its accurate attitude, no penalty might have been imposed upon the assessee;
non filing of the e-TDS statements has no longer resulted in any loss to the sales and so no penalty could have been imposed.
The sales submitted the subsequent earlier than the high courtroom-
questions of regulation do no rise up for attention in this enchantment as the Tribunal has on a cautious appreciation of information, disregarded the appeals;
the penalty became efficiently imposed on the assessee because the e-TDS statements have been not filed in time and no great explanation changed into presented.
The excessive court docket did not take delivery of the competition of the appellant that no opportunity became granted to him. despite the fact that no order became exceeded on the application, the appellant changed into obliged to record the statement and offer an evidence however even after the expiry of the duration prayed for in the software, the appellant did no longer supply any cause of the postpone in filing e-TDS statements. The assessing authority, therefore, within the absence of any clarification having been provided by way of the appellant, levied penalty underneath phase 272A(2)(okay) of the Act. The appellant handiest offered rationalization earlier than the Commissioner (Appeals), who decreased the penalty. The high court in addition held that it could not also be urged by using the appellant that no penalty could have been imposed for non submitting of the e-TDS statements in time because it has no longer led to any loss to the revenue since the branch cannot correctly method the returns on whose behalf tax has been deducted till information of such deduction is furnished by means of the deductor within the prescribed time restrict and the timely processing of returns is the bedrock of an efficient tax administrative device. The high court docket held that sizable questions of law that have been framed in this enchantment do no longer arise for attention and brushed off the appeal.