Late TDS Return Filing Penalty not waived if PANs consequences.

Penalty for delay in filing of TDS return couldn't be levied if there was difficulty in obtaining PANs of deductees.

Where in view of change in IT system requiring furnishing details of PANs of all deductees for validation and uploading of e-TDS return, assessee delayed in filing its return in making efforts to obtain such details of deductees spreading throughout country, no penalty could be levied.

Source: Taxmann

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Maximum Penalty of Rs. 10000 on Delay in Filing of Income Tax Returns

Delay in filing Income Tax returns will now attract fine upto Rs 10,000

For income below Rs. 5 lakh, filing returns after July will attract a fine of Rs. 1,000, while for income above Rs. 5 lakh it will be Rs. 5,000, if it is filed after the due date but on or before December 31 of the assessment year.

The Budget has proposed imposing a fine for not filing income tax returns within the due date. For income below Rs. 5 lakh, filing returns after July will attract a fine of Rs. 1,000, while for income above Rs. 5 lakh it will be Rs. 5,000, if it is filed after the due date but on or before December 31 of the assessment year. It has also proposed a fee of Rs. 10,000 in any other case.

At a post-Budget event organised by the Institute of Chartered Accountants of India, Hasmukh Adhia, revenue secretary said that those who have an income of Rs. 5 lakh and above and file returns after July but till December will face a fine of Rs. 5,000. “This fine will be raised to Rs. 10,000 if the return is filled after December,” he said.

Time limit for filing revised return reduced

Under Section 139(5) of the Income Tax Act, an assessee can file revised return within two years from the end of the relevant fiscal year or before the completion of assessment by tax authorities, whichever is earlier. The Finance Bill proposes to reduce the time limit for filing such revised return to one year from the end of relevant fiscal year or before the completion of the assessment by tax authorities, whichever is earlier. This amendment shall be effective from fiscal year 2017-18.

A revised return can be filed if the assessee has filed the return within the due date. For filing the revised return, one has to enter the acknowledgement number and the date of filing of the original return in the revised form.

The Budget has also proposed to reduce the time limit for completion of assessment under Section 153 of the I-T Act. In assessment year 2018-19, it will be 18 months from the end of the assessment year. From assessment year 2019-20, it will be 12 months from the end of the assessment year. It has also reduced the time limit for completion of re-assessment. In respect of notices served under Section 148 of the I-T Act on or after April 1, 2019, the time limit for completion of assessment or re-assessment will be 12 months from the end of the financial year in which the notice is served.

Interest on refund

Under Section 244(A) of the I-T Act, an assessee is entitled to receive interest on refund because of excess payment of advance tax, tax deducted or collected at source. The assessee will, in addition to the refund amount, will receive simple interest on such refund at the rate of 1.5% for every month or part of a month from the date on which claim for refund is made in the returns or in case of an order passed in appeal, from the date on which the tax is paid to the date on which refund is granted.

Source: The Financial Express

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What are the Penalties under Income Tax Act ?

A complete list of Penalties under Income Tax Act, 1961

1. Penalty under Section 270A (Penalty for under reporting and misreporting of income):

If during the assessment proceedings, it is found that an assessee have under reported or misreported his income, then penalty u/s. 270A will be imposed on the Assessee. This is the harshest penalty that can be imposed by the department. The amount of penalty will be 50% of the tax payable on under reported income. However, under reported income is a result of misreporting, then the penalty amount is increased to 200% of the tax payable on under reported income.

2. Penalty under Section 271A - Default in maintaining or retaining books of account:

If during the assessment proceedings, it is found that an assessee have not maintained any books of accounts or other documents as required under Section 44AA, or the Assessing Officer finds that an assessee have not retained the books of accounts and other necessary documents for the minimum time period (say 6 years), then a penalty of Rs. 25,000 will be imposed.

3. Penalty under Section 271B - Default in Tax Audit:

If during the assessment proceedings, it is found that an assessee were supposed to get his accounts audited under section 44AB, but fails to do so, then penalty under section 271B of the Act will be imposed.

The amount of penalty will be a sum equal to 0.5% of gross sales, gross turn over or gross receipts, as the case may  be, but in any case this penalty cannot exceed Rs. 50,000.

4. Penalty under Section 271C - Default in deducting tax at source:

If during the assessment proceedings, it is found that an assessee has failed to deduct whole or any part of TDS as required by income tax laws, then the penalty will be a sum equivalent to the amount of tax not deducted.

5. Penalty under section 271CA - Default in collecting tax at source:

If during the assessment proceedings, it is found that an assessee has failed to collect whole or any part of TCS as required by income tax laws, then a penalty of a sum equivalent to the amount of tax not collected will be imposed. 

6. Penalty under Section 271D - Accepting loans in cash:

If during the assessment proceedings, it is found that an assessee has accepted a loan or deposit from any other person in cash for a sum exceeding Rs. 20,000 in a financial year, then a sum equal to the amount of loan accepted will be demanded from the assessee by way of penalty.

7. Penalty under Section 271E - Repayment of loans in cash:

If during the assessment proceedings, it is found that an assessee has repaid any loan or deposit to any other person in cash for a sum exceeding Rs. 20,000 in a financial year, then a sum equal to the amount of loan repaid will be demanded from the assessee by way of penalty.

8. Penalty under Section 271F - Non-filing of Income Tax Return:

If during the assessment proceedings, it is found that an assessee has filed his or her Return for a financial year by the end of the following financial year for which the Return has to be furnished, then a penalty of Rs. 5,000 will be imposed.

9. Penalty under section 271H - Non filing of TDS Return   

If during the assessment proceedings, it is found that an assessee has no furnished the TDS Returns even after expiry of 1 year from the due date of filing such returns or has furnished any incorrect information in the TDS Returns filed by him, then a penalty of a minimum of Rs. 10,000 and maximum of Rs. 1,00,000 will be imposed.

10. Penalty under Section 272B - Not having PAN or providing incorrect PAN:

If during the assessment proceedings, it is found that an assessee has not applied for a PAN even though it was required as per section 139A or where after obtaining a PAN, an assessee not intimated the same or provided incorrect PAN to any person under the provisions of the Income Tax Act, then a penalty of Rs. 10,000 will be imposed.

11. Penalty under Section 272BBB - Not having TAN or providing incorrect TAN:

If during the assessment proceedings, it is found that an assessee has not applied for a Tax deduction account number or a Tax collection account number as required by section 203A and Section 206CA respectively, or where after obtaining a TAN, an assessee provided incorrect TAN on the challans and certificates by him, then a penalty of Rs.10,000 will be imposed.

Reference :

1. Taxmann’s Income Tax Act, as amended by Finance Act, 2016, 60th Edition

2. A N Aiyar’s Indian Tax Laws - 2016, as amended by Finance Act, 2016, 53rd Edition 

3. Direct Taxes - Laws & Practice by Dr. Girish Ahuja & Dr. Ravi Gupta, as amended by Finance Act, 2016, 7th Edition

4. Kanga & Palkhivala’s - The Law and Practice of Income Tax - Volume II, Tenth Edition

Source: CA Club India

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Penalty or Interest causes by Late Filing of Income Tax Return - Asstt. Year 2016-17

We all are well known the importance of Income Tax Filing.  Though this some tax payee neglect to file income tax return in due date.  Therefore, all the Tax Return Filers i.e. Tax Consultant, Business Men and special Salaried Employee (Taxpayer) who are filed non-audit and non-corporate Assessee's Income Tax Return by extended due date  i.e. 05th August, 2016 for Asstt. Year 2016-17. The details about Late filing and due date of Income Tax Return are as under:

Due date of filing of income tax return for Assessment Year 2016-17 :

• The due-date for filing of returns for non-audit & non-corporate assessee’s is 31st July of the assessment year 2016-17 which extended to 05th August, 2016.
• In case of an assessee, being a partner of a firm liable to audit u/s. 44AB, the applicable due-date shall be 30th September of the assessment year (The said limits are as per the provisions of section 139(1) of the Act).
• In the case of an assessee liable to submit a report u/s. 92E (Transfer Pricing Report) of the Act, the applicable due-date is 30th November of the assessment year.

Income Heads covered under due date 31st July, 2015

• Salary, Pension,
• Income from other source like interest income,
• Income from capital gain, 
• Income from house property and 
• Income from person owning small business and not liable to get their accounts audited are covered.

Major Effects of Non Filing of Income Tax Return by Due Date for Fin.Year 2013-14, Asstt. Year 2014-15 and onwards ?

• Losses can not be carry forward.
• Interest u/s. 234A will be charges @ 1% PM applicable.
• Income Tax Return e-Filing is Mandatory, if Annual Taxable Income is not less than 5 Lakhs.
• Income Tax Return can not be revised at any cost if filied not in time.

What happen next when Taxpayee not file Income Tax Return in Due Date ?

• There is no any penalty on late filing of Income Tax Return.

What says Income Tax section 271F regarding late filing of Return ?

If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees

so this section says end of relevant assessment year, for previous year 2013-14, assessment year is 2014-15 and it will ends on 31.03.2015 and onwards, means there is no penalty for late filing of income tax return up to 31.03.2015 and onward and after that assessing officer(AO) can impose a penalty of Rs. 5000, and that is also his (AO) power which he may or may not exercise after giving due hearing to the assessee.

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Common Mistakes That Could Attract 200% Income Tax Penalty

Any concealment of income or under-reporting of income to evade tax can cost you dearly. The tracking mechanism of the income tax department has improved significantly in recent years. Now, you have to report your permanent account number (PAN) for all major transactions. Financial institutions with which you deal with like your bank, mutual fund company or credit card company feed the tax department with information regarding your transactions. The penalty in case of concealment and under-reporting of income can be as high as 200 per cent.

"If you under-report income or don't report some of your income, you may receive notice from the tax department questioning the reason behind it. A penalty will be charged as per the tax laws," says Preeti Khurana, chief editor of Cleartax portal.

According to tax experts, these are some of the income people generally don't declare to the tax authorities.

Gains or return on investment made in the name of spouse or minor child: Many people invest in the name their child or non-working spouse. Gifting money to certain relatives including spouse and minor child is exempt from tax. But if that is invested, the return from the investment has to be clubbed with the income of the person giving the gift (the giftor).

Suppose you have bought a property in the name of your wife and if she had not paid any money towards the purchase of the house, the rental income will be clubbed with your income and will be taxed as per your slab.

Interest income: Interest earned on investments such as fixed deposits, bonds etc are taxable and you have to report it in your tax return. The exemption available is only in case of interest earned on savings account. Interest earned up to Rs 10,000 is exempt from income tax but even in this case you have to show the income in your income tax return and claim the exemption.

Not reporting income from other sources: Suppose you worked as a freelancer for some part of the year and took up a job after that. Your employer will deduct TDS from your salary but you have to also report the income you as a freelancer in your tax return.

Received gifts: If you have received gifts in terms of cash and movable or immovable property worth more than Rs 50,000 other than from your relatives, it is taxable in your hands. Gifts received on the occasion of marriage are exempted from this rule.

Not reporting foreign assets and income: This is considered a serious offence and could attract higher penalty. Suppose you work in a multinational company whose shares are listed abroad. If you have received shares under employee compensation scheme, you will have to report it in your tax return.

Source: NDTV Profit

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Statutory provisions attracted on failure to deduct and deposit Tax.

Where the employer has failed to deduct tax or when short deduction of tax has been done, following statutory provisions are attracted:-

Charging of interest u/s 201(1A) – The deductor is treated to be ‘assessee in default’ in respect of the short deduction/non deduction of tax. Under Section 201(1A) he is liable to pay simple interest @ 1% for every month or part of a month on the amount of tax in arrear from the date on which such tax was deductible to the date on which such tax is actually deducted. Further such interest shall be paid before furnishing the quarterly statement of each quarter.  Charging of interest u/s 201(1A) is mandatory and there is no provision for its waiver.

Procedure for interest calculation

The calculation of interest is to be done as per Rule 119A and is summarized below:

• Where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be full month and interest shall be so calculated.
• The amount of tax in respect of which interest is to be calculated is to be rounded off to nearest multiple of Rs. 100 ignoring any fraction of Rs. 100.

Penalty u/s 221 - The assessee in default is liable to imposition of penalty where the assessing officer is satisfied that the defaulter has failed to deduct tax as required without good and sufficient reason. The quantum of penalty is not to exceed the amount of tax in arrear. Besides, a reasonable opportunity of being heard is to be given to the assessee.

Penalty u/s 271C – A penalty equivalent to the amount of tax the deductor has failed to deduct, is leviable u/s 271C. Such penalty is however only leviable by a Joint Commissioner of Income Tax.

Where the employee has deducted the tax at source but failed to deposit wholly or partly, the tax so deducted in government account, the following statutory provisions are attracted:-

• Interest u/s 201(1A)- The deductor is treated as an assessee in default and interest u/s 201(1A) is leviable @1.5% for every month or part of the nonth on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. Further, the tax along with the simple interest u/s 201(1A) becomes a charge upon all the assets of the deductor.
• Penalty u/s 221- Penalty to the extent of tax not deposited is leviable by the A.O. 
• Prosecution proceedings u/s 276 B- Where the deductor has failed to deposit tax deducted at source, in govt. a/c without a reasonable cause then he is punishable with rigorous imprisonment for a term which shall not be less than 3 months but which may extend to 7 years and with fine.

Source: www.tdsman.com

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No penalty on non-deduction of tax if assessee bona-fide believed that no tax shall be deducted

Gifts were distributed without deducting tax to employees on a bona fide believe that such gifts shall not form part of salary. Thus, such distribution shall not attract penalty.   image1

Case: Commissioner of Income Tax vs. Indian Petrochemicals Corporation Ltd.

Facts:

The assessee being a Public Sector Unit filed its return of income. The cas was under scrutiny. The AO noticed that the assessee distributed gifts coupons to its employees. The said gifts were not disclosd in the return and thus, no deduction of tax on the same.

The AO passes an order under section 201 (1). Penalty under section 271(1)(c) was also imposed on the assessee.

The Commissioner (Appeals) rejected the appeal of the assessee.

Aggrieved by the order, assessee appealed to the tribunal. The Tribunal deleted the penalty levied upon the assessee.

Revenue appealed to the High Court.

Held:

The Revenue argued that the gift coupons given to employees were for performance of their duty and not as mementos. Therefore, they were classified as perquisite in the hands of the employees.

While the assessee submitted that being a large scale Public Sector Undertaking pays a huge amount of tax in terms of deduction from salary of its employees. Even the past record of the company does not show any default in payment of TDS.

The assessee bona-fide believed that the gifts coupons distributed shall not form part of salaries. It was under an impression that gift coupons, being in the nature of mementos to commemorate conferment of awards, were not in the nature of payment of salary.

Since the assessee was under a genuine and bona fide belief that it was not under any obligation to deduct tax at source, penalty u/s.271C shall not be levied as reasonable cause was shown for not deducting tax at source. The liability to penalty u/s.271C shall be imposed only on the person who does not have good and sufficient reason for not deducting tax at source.

Thus, no penalty on non-deduction of tax if assessee bona-fide believed that no tax shall be deducted.

Source: Tax Mantra (Alok Patnia)

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Late Filing Fees and Penalty for TDS/TCS Statements for Asstt. Year 2015-16

Before understanding the penalty provisions for failure to furnish the statement of Tax Deducted at Source or statement of Tax Collected as Source (i.e. commonly known as TDS/TCS return) we shall first have a look at the few basic duties of a person liable to deduct/collect tax at source and due dates for filing of TDS/TCS return.

Duties of the person liable to deduct/collect tax at source

• He shall obtain Tax Deduction Account Number or Tax Collection Account Number (as the case may be) and quote the same in all the documents pertaining to TDS/TCS.
• He shall deduct/collect the tax at source at the applicable rate.
• He shall pay the tax deducted/collected by him to the credit of the Government.
• He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
• He shall issue the TDS/TCS certificate in respect of tax deducted/collected by him.

Due Dates for filing of TDS/TCS return

The due dates for filing of statement of TDS i.e. TDS return for different quarters are as follows:

Now we will understand the provisions relating to penalty for not furnishing the TDS/TCS statement i.e. TDS/TCS return. 

Basic provisions

A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed in this regard has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H.  In this part you can gain knowledge about the provisions of section 234E and section 271H.

Late filing fees under section 234E

As per section 234E, where a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS. TDS/TCS return cannot be filed without payment of late filing fees as discussed above. In other words, the late filing fees shall be deposited before filing the TDS return. It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.

Read about Penalty under section 271H (Click Here)

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Relaxation in Penalty for non-payment/short-payment of service tax provision in Finance Act

The Budget 2015 has the intention of the government to align the penal provisions as contained in the Excise and Service tax laws. The penalty section 11AC of the Excise has been substituted and similar changes have been made in the section 76 and 78 of the Finance Act.

Erstwhile section 76 (Penalty for failure to pay service tax) provides:

Any person, liable to pay service tax fails to pay such tax, shall pay, in addition to such tax and the interest on that tax, a penalty which shall not be less than

• one hundred rupees for every day during which such failure continues or
• at the rate of one percent of such tax, per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax:

Provided that the total amount of the penalty payable in terms of this section shall not exceed fifty per cent of service tax payable.

Amendment:

The amendment in section 76, seeks to simplify the computation of the amount of penalty payable under this section. The substituted section simplifies the computation of penalty under this section and restricts the penalty to 10% of the amount of service tax payable. Not only this, the amended section also seeks to provide additional benefit that no penalty shall be leviable, if service tax and interest is paid within 30 days from the date of service of show cause notice.

Note: After this amendment, the assessee can get waiver from penalty imposed under section 76 for non-payment/short-payment of service tax. Thus, there is relaxation in penalty for non-payment/short-payment of service tax provision in Finance Act.

Amended Section 76:

(1) Where service tax has not been levied or paid, or has been short-levied or short-paid, or erroneously refunded, for any reason, other than the reason of fraud or collusion or willful misstatement or suppression of facts or contravention of any of the provisions-

the person who has been served notice under section 73(1) shall, in addition to the service tax and interest specified in the notice, be also liable to pay a penalty not exceeding ten per cent of the amount of such service tax:

Provided that where such service tax and interest is paid within a period of thirty days of–

• the date of service of notice under sub-section (1) of section 73, no penalty shall be payable;
• the date of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73, the penalty payable shall be twenty-five per cent of the penalty imposed in that order, only if such reduced penalty is also paid within such period.

(2) Where the Commissioner (Appeals), the Appellate Tribunal or, the court, as the case may be, modifies the service tax determined under section 73(2)-

the amount of penalty payable thereon, shall also stand modified accordingly, and the benefit of reduced penalty under the proviso to sub-section (1) shall be available if such service tax, interest and reduced penalty so payable, is paid within a period of thirty days from the date of receipt of the order by which such modification is made.”

Source: www.taxmantra.com

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Late Filing Fees and Penalty for Failure to Furnish/Delay in Furnishing the TDS/TCS Statements.

Recently Finance (No.2) Act, 2014 has been amended by CBDT and as per this amendment the details of late filing fees and penalty for failure to furnish / delay in furnishing the TDS/TCS Statements is as under:

Before understanding the penalty provisions for failure to furnish the statement of Tax Deducted at Source or statement of Tax Collected as Source (i.e. commonly known as TDS/TCS return) we shall first have a look at the few basic duties of a person liable to deduct/collect tax at source and due dates for filing of TDS/TCS return.
 

Duties of the person liable to deduct/collect tax at source

• He shall obtain Tax Deduction Account Number or Tax Collection Account Number (as the case may be) and quote the same in all the documents pertaining to TDS/TCS.
• He shall deduct/collect the tax at source at the applicable rate.
• He shall pay the tax deducted/collected by him to the credit of the Government.
• He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
• He shall issue the TDS/TCS certificate in respect of tax deducted/collected by him.

Due Dates for filing of TDS/TCS return
 

The due dates for filing of statement of TDS i.e. TDS return for different quarters are as follows:

Date of ending of the quarter of the financial year	Due date for Government deductor	Due date for any other deductor
30th June	31st July of the financial year	15th July of the financial year
30th September	31st October of the financial year	15th October of the financial year
31st December	31st January of the financial year	15th January of the financial year
31st March	15th May of the financial year immediately following the financial year in which deduction is made	15th May of the financial year immediately following the financial year in which deduction is made.

Now we will understand the provisions relating to penalty for not furnishing the TDS/TCS statement i.e. TDS/TCS return.

Basic Provision

A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed in this regard has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H. In this part you can gain knowledge about the provisions of section 234E and section 271H.

Late filing fees under section 234E

As per section 234E, where a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS.

TDS/TCS return cannot be filed without payment of late filing fees as discussed above. In other words, the late filing fees shall be deposited before filing the TDS return. It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.

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Interest u/s. 234B can't be charged on some Dis-allownaces by A.O.

Assessing Officer has not any right to charge interest u/s. 234B on non deduction of TDS u/s. 194C, 194A, 194H, 194I, 194J and 195.

The dis-allowance on account of non deduction of tax at source is now very common form of dis-allowance by the assessing officer. Such dis-allowance is done u/s 40(a)(i) and 40(a)(ia)  of the Income Tax Act. Very common dis-allowances for non deductions of tax at source  are as under :

• Non deduction on contractual works (Section 194C )
• Non deduction of tax on interest (194A)
• Non deduction of tax on commission (194H)
• Non deduction of tax on rent  (194 I)
• Non deduction of tax on professional and technical fee (194J)
• Non deduction of tax on payments to Non Residents.(195)

The Assessing Officer (A.O.) computes on increased total income and charges interest u/s 234B. Thus, interest u/s 234B is charged also on the tax on dis-allowance u/s 40(a)(i) which is included in total income.

Source: www.taxbymanish.blogspot.com

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Penalty u/s. 271H on Failuer of furnining statment or Incorrect Information.

Recently, CBDT has issued a circular for computation of Income of Salaried Person for Asstt. Year 2015-16.  In this circular the detailed information about Income Tax Deduction, Returns and other exemptions along with some penalties and many more.  Thus the big part of Penalty is that for non-filing of statement or furnining incorrect infromation u/s. 271H which is as under:

If a person fails to deliver or caused to be delivered a statement within the time prescribed in section 200(3) or furnishes an incorrect statement, in respect of tax deducted at source on or after 1.07.2012, he shall be liable to pay, by way of penalty a sum which shall not be less than Rs. 10,000/- but which may extend to Rs 1,00,000/-. However, the penalty shall not be levied if the person proves that after paying TDS with the fee and interest, if any, to the credit of Central Government, he had delivered such statement before the expiry of one year from the time prescribed for delivering the statement.

At the time of preparing statements of tax deducted, the deductor is required to:

1. mandatorily quote his tax deduction and collection account number (TAN) in the statement;
2. mandatorily quote his permanent account number (PAN) in the statement except in the case where the deductor is an office of the Government( including State Government). In case of Government deductors “PANNOTREQD" to be quoted in the e-TDS statement;
3. mandatorily quote PAN of all deductees; 
4. furnish particulars of the tax paid to the Central Government including book identification number or challan identification number, as the case may be.
5. furnish particular of amounts paid or credited on which tax was not deducted in view of the issue of certificate of no deduction of tax u/s 197 by the assessing officer of the payee.

It may be noted that under the new TDS procedure, TAN of the deductor/ PAN of the deductee and receipt number of TDS statement filed by the deductor act as unique identifier for granting online credit of TDS to the deductee. Hence due care should be taken in filling these particulars. Due care should also be taken in indicating correct CIN/ BIN in TDS statements.

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HC stays Levy of Interest U/s. 234A on I-T returns filed till extended due date of 30.11.2014

Due Date for filing of return of Income for Assessment Year 2014-15 Extended from 30th September, 2014 to 30th November, 2014 in Specified Cases

The CBDT had issued the notification no. F.No.153/53/2014-TPL (Pt.I) dated 26.09.2014 extending the due date to comply with the judgments of various high courts, such as Gujarat, Bombay, Andhra Pradesh and Madras.

High Courts have earlier held that As the due date for filing of the tax audit report was extended till November 30 (due to late Introduction of several changes in Form 3CD), it was logical to also extend the due date for filing of the I-T return also to November 30.

During hearing on the appeal on 22.09.2014 Honourable Gujarat High Court has directed the CBDT to extend the due date for filing of return of income to 30.11.2014 for A.Y. 2014-15 for all purposes, inter-alia, carry forward of losses, allowability of deductions under Sections 80-IA, 80-IB, 80-IC, 80-ID and other sections which requires return to be filed before due date. However, such extension has been granted subject to charge of interest under Section 234A (For delay in filing of Return of Income) for the period commencing from 01-10-2014 and up to the actual date of filling the return of income. Interest under section 234A will not be levied if taxpayer covered under tax audit provisions pays the tax on or before 30.09.2014 despite filing of return after 30.09.2014.

Anita Sumanth, advocate, representing the All India Federation of Tax Practitioners, and an individual petitioner, G Baskar, submitted to the Madras high court that the levy of interest under section 234A of the Income Tax Act,1961 is unjustified and against the provisions of the law. If the penalty was levied, the purpose of extending the due date of filing the I-T return itself was defeated. She submitted that the Gujarat high court order relating to levy of interest under section 234A was only a suggestion or a concession, it was not an interpretation of law and it was opposed to statutory provisions.

Based on the submissions, the Madras high court granted an interim stay on the levy of interest. It held, “I-T returns shall be accepted by tax authorities without insisting upon any payment of interest under section 234A.”

Source: www.tdstaxindia.com

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Penalty order passed U/S 271C for non-deduction of TDS, beyond period of 6 months from date of reference for imposition of penalty would be barred by limitation

Recently, ITAT Jaipur Bench in M.D.S. Universityvs. Assistant Commissioner of Income-tax held that, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated whichever period expires later, the penalty U/S 271C cannot be imposed.

Facts of the case:

Penalty during the course of TDS survey, it was found that the assessee had not made TDS out of mobilization advance paid to M,’s Rajasthan State Road Development Corporation Ltd. The ITO (TDS), Ajmer on.19th March, 2000, held the assessee deductor as defaulter and raised a demand of TDS. This was brought to the notice of Addl. CIT, Udaipur, who issued a notice under s. 274/271C of the Act to show cause as to why penalty under s. 271C should not be imposed in its case for default of not making TDS U/S194C of the Act while making advances to M/s Rajasthan State Road Development Corporation Ltd. (RSRDCL).

The assessee submitted in its reply that it did not make any TDS on the payments made to RSRDCL on the impression that the TDS provisions were not applicable in view of s. 196 of the Act. It was further submitted that the assessee-deductor had deposited the entire payment raised by ITO (TDS) within a stipulated time. However, the AO did not find merit in the submissions of the assessee and levied penalty U/S 271C of the Act vide order dt. 18th Aug., 2010.

Being aggrieved, the assessee carried the matter to the learned CIT (A), who confirmed the penalty stating that the argument of the appellant that tax is to be deducted on the income component of the payment is not acceptable.

Hence, an appeal was made by the assesse.

It was held that:

Learned counsel for the assessee submitted that the penalty levied by the AO was barred by limitation as per the provisions contained in s. 275(l)(c) of the Act which provides that “no penalty can be imposed after expiry of financial year in which proceedings, in the course of which action for imposition of penalty has been initiated are completed”. It was contended that in this case, the relevant proceedings were commenced on 19th March, 2009 and the financial year ends on 31st March, 2009. It was further stated that the penalty could not have been imposed from the end of the month, in which action for imposition of penalty was initiated, which in the present case was on 24th Dec., 2009. Therefore, the penalty could have been levied before 30th June, 2010, however, in this case it was levied on 18th Aug., 2010, so, it was barred by limitation.

Thus it was held that, the penalty U/S 271C levied in the case was not justified and liable to be set aside. Considering the totality of the facts the ITAT was of the view that the learned CIT(A) was not justified in confirming the penalty order passed by the AO under s. 271C of the Act.

Source: Mr. Alok Patnia, founder of Taxmantra.com 

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No TDS liability of assessee on fees charged by NR bank.

Where a foreign bank charged certain sum terming it as interest on an Indian bank in process of negotiating letter of credit on behalf of its customer i.e. assessee, and said bank recouped amount from assessee, in view of fact that assessee had privity of contract with Indian bank and amounts were also paid to Indian bank only, transaction in question could not be said to fall within meaning of section 195 and, therefore, assessee was not required to deduct tax at source while making payments of interest

Where assessee claimed deduction of conveyance allowance paid to employees on lump sum basis without there being any correlation to expenses actually incurred and without showing that it was paid for defraying expenses wholly, necessarily and exclusively in performance of their duty, Tribunal was justified in rejecting said claim

Source: www.taxmann.com

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Late Filing of Income Tax Return causes Penalty for Asstt. Year 2014-15

All the Tax Return Filers i.e. Tax Consultant, Business Men and special Salaried Employee (Taxpayer) who are filed non-audit and non-corporate Assessee's Income Tax Return by due date i.e. 31st July, 2014 for Asstt. Year 2014-15. The details about Late filing and due date of Income Tax Return are as under:

Due date of filing of income tax return for Assessment Year 2014-15 :

• The due-date for filing of returns for non-audit & non-corporate assessee’s is 31st July of the assessment year 2014-15.
• In case of an assessee, being a partner of a firm liable to audit u/s. 44AB, the applicable due-date shall be 30th September of the assessment year (The said limits are as per the provisions of section 139(1) of the Act).
• In the case of an assessee liable to submit a report u/s. 92E (Transfer Pricing Report) of the Act, the applicable due-date is 30th November of the assessment year.

Income Heads covered under due date 31st July, 2014

• Salary, Pension,
• Income from other source like interest income,
• Income from capital gain, 
• Income from house property and 
• Income from person owning small business and not liable to get their accounts audited are covered.

Major Effects of Non Filing of Income Tax Return by Due Date for Fin.Year 2013-14, Asstt. Year 2014-15 ?

• Losses can not be carry forward.
• Interest u/s. 234A will be charges @ 1% PM applicable.
• Income Tax Return e-Filing is Mandatory, if Annual Taxable Income is not less than 5 Lakhs.
• Income Tax Return can not be revised at any cost if filied not in time.

What happen next when Taxpayee not file Income Tax Return in Due Date ?

• There is no any penalty on late filing of Income Tax Return.

What says Income Tax section 271F regarding late filing of Return ?

If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees

so this section says end of relevant assessment year, for previous year 2013-14, assessment year is 2014-15 and it will ends on 31.03.2015 ,means there is no penalty for late filing of income tax return up to 31.03.2015 and after that assessing officer(AO) can impose a penalty of Rs. 5000, and that is also his (AO) power which he may or may not exercise after giving due hearing to the assessee.

Download New Income Tax Return Forms For Assessment Year 2014-15 

• Excel Format (ITR-1, ITR-2, ITR-3, ITR-4, ITR-4S)
• Java Format (ITR-1, ITR-2, ITR-3, ITR-4, ITR-4S)

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Avoide Penalties, Issue TDS Certificate on or before 30th July, 2014 of Q1 for Asstt. Year 2015-16

Now a days all TDS Deductors want to avoide every consequences arising on behalf of this matter from Income Tax Department, therefore issue TDS Certificate on or before 30th July, 2014 of Q1 for Fin. Year 2014-15 and Asstt. Year 2015-16. The Last date to issue a TDS/TCS Certificates for Q1 of Fin. Year 2014-15 is 30th July, 2014.  This last/due date is applicable for all deductors who are other than the office of the Government.

Delay in requesting certificates may involve a fine of Rs. 100 per day u/s 272(A)(g) subject to an upper limit of the tax deducted.

Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):

Default/ Failure	Section	Nature of Demand	Quantum of demand or penalty
Failure to deduct tax at source	201(1)	Tax demand	Equal to tax amount deductible but not deducted
	201(1A)	Interest	@1 % p.m. of tax deductible
	271C	Penalty	Equal amount of tax deductible but not deducted
Failure to deposit tax at source	201(1)	Tax demand	Equal to tax amount not deposited
	201(1A)	Interest	@1.5% p.m. of tax not deducted
	276B	Prosecution	Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine
Failure to apply for TAN No. u/s 203A	272BB	Penalty	Rs. 10000
Failure to furnish prescribed statements u/s 200(3)	272A(2)(k)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to issue TDS certificate u/s 203	272(A)(g)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount.
Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C)	272(A)(i)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to mention PAN of the deductee in the TDS statements and certificates	272B	Penalty	Rs. 10000

If TDS return is not filed within the specified due dates being 15th July, 2013 for the 1st quarter corresponding to FY 2013-14, the major consequences would be levy interest.

However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.

Please note:
It is now mandatory for all the deductors to issue the TDS certificates after generating and downloading the same from “TRACES”(www.tdscpc.gov.in). Refer to Circular no.3/2011 dated 13-5-2011, Circular No.1/ 2012 dated 9-4-2012 (in respect of 16A)

Download Form-16A from TRACES (Click Here)

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Last date to issue TDS/TCS Certificate is 30.05.2014, Delay may cause Fine/Penalty.

Income Tax Department had issued instructions, notifications, circulars, press notes etc. for awarness regarding Tax and TDS or TCS to Deductors, Taxapyee etc.  Apart from this the TDS deductors will make mistakes and face unwanted critical problems of Tax and TDS.  In this matter, we bring your consideration about Fine and Penalties which comes u/s. 272(A)(g).  The  is applicable for deductors other than the Office of the Government.  The Delay in requesting certificates or issuance of TDS/TCS Certificates for Q4 of Asstt. Year 2014-15 may causes fine of Rs. 100 per day u/s 272(A)(g) subject to an upper limit of the tax deducted.  The last date for issuance of TDS/TCS certificates for Q4 of Fin.Year 2013-14 is 30th May, 2014.

Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):

Default/ Failure	Section	Nature of Demand	Quantum of demand or penalty
Failure to deduct tax at source	201(1)	Tax demand	Equal to tax amount deductible but not deducted
	201(1A)	Interest	@1 % p.m. of tax deductible
	271C	Penalty	Equal amount of tax deductible but not deducted
Failure to deposit tax at source	201(1)	Tax demand	Equal to tax amount not deposited
	201(1A)	Interest	@1.5% p.m. of tax not deducted
	276B	Prosecution	Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine
Failure to apply for TAN No. u/s 203A	272BB	Penalty	Rs. 10000
Failure to furnish prescribed statements u/s 200(3)	272A(2)(k)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to issue TDS certificate u/s 203	272(A)(g)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount.
Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C)	272(A)(i)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to mention PAN of the deductee in the TDS statements and certificates	272B	Penalty	Rs. 10000

If TDS return is not filed within the specified due dates being 15th July, 2013 for the 1st quarter corresponding to FY 2013-14, the major consequences would be levy interest.

However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.

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