Recently, Centralized Processing Cell (TDS), found outstanding TDS as Short Payment due to "Insufficient Challans" exceeding Rupees 1 Crore from Financial Year 2007-08 onwards. Thus the CPS instruct to TDS Deductor or TCS Collector should clarify Short Payment defaults are due to "Insufficient Challans". The CPC(TDS) further clarify that, if the due Short Payment found as "Insufficient Challans" by TDS Deductors or TCS Collector they should penalised as Consequences of failure to pay the demands and Action to be taken at the earliest against them. The details are as under:
The referenced Short Payment Defaults are due to "Insufficient Challans".This could be due to the following reasons:
- You have adequate balance available in OLTAS challans, however, some other challans may have been incorrectly used, which are already consumed.
- You have tried to consume more than the available challan amount for reporting TDS deducted in the statements.
In this respect, you are requested to take not of the following provisions of the Income Tax Act, 1961:
Consequences of failure to pay the demand:
- As per the provisions of section 220 of the Act, Any amount, specified as payable in a notice of demand shall be paid within thirty days of the service of the notice.
- If the amount specified in any notice of demand is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid.
- If any person fails to deduct or pay the whole or any part of the tax, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay under Section 271C of the Act.
- Failure to pay tax to the credit of Central Government is punishable with fine as per the provisions of section 276B/ 276BB.
- Section 278A of the Act prescribes for punishment for second and subsequent offences, if any person has been convicted of an offence under section 276B.
Action to be taken at the earliest:
- Download the Justification Report from our portal TRACES to view your latest outstanding demand. Please click here for assistance on downloading the Justification Report.
- Use Challan ITNS 281 to pay the above demand with your relevant Banker, if there are no challans available for consumption.
- If there are unconsumed Challans available, please use Move Deductee facility using Online Corrections, as specified below
- Download the Conso File from our portal. Please use the e-tutorials for necessary help
- Prepare a Correction Statement using the latest Return Preparation Utility (RPU) and File Validation Utility (FVU).
- Submit the Correction Statement at TIN Facilitation Centre.
- You can use the Online Corrections facility on TRACES to submit corrections, to payoff the demand. To avail the facility, please Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down list. You can refer to our e-tutorials for necessary help
