Deductor not responsible for non-mention PAN of Deductee in TDS Certificate.

As per Income Tax rulings regarding issuing of Form-16 or 16A, deductors are not responsible for non-mention of payee’s PAN in it. In the other words we can say if the TDS Deductee or Taxpayee not provided his PAN before issuing Form-16 or 16A, there is no penalty on deductor for non-mention payee’s PAN in there.

The following points will clarify the same:

• If payee doesn’t furnish his PAN to deductor as required by section 139A(5A), deductor can’t be penalized under section 139A(5B) read with section 223B(1) for not mentioning payee’s PAN in TDS certificate issued to payee in Form 16A.

• Where there is nothing on record to show that contractors to whom certain amounts were paid by asssessee after deducting TDS under section 194C/194J had intimated their PANs to assessee (deductor) as required by section 139A(5A), penalty can’t be imposed on assessee (deductor) under section 272B(1) for non-mention of the PANs of the contractors(payees) in Form 16A TDS certificates issued to them.

• Default by contractors (payees) in furnishing their PANs to assessee (deductor) as per the requirements of section 139A(5A) is “sufficient cause” within the meaning of section 273B for deductor’s contravention of section 139A(5B) (failing to mention PANs of payee-contractors on their TDS certificates in Form 16A issued to payee-contractors). In view of this sufficient cause, no penalty imposable.

Complete Upload Procedure of e-TDS/TCS/AIR Online Return

NSDL e-Governance Infrastructure Limited launched an online upload of e-TDS return facility enabling entities to directly furnish (upload) their e-TDS returns (Form 24, 26 and 27 only) to the TIN central system through the Internet on July 10, 2004.

Online upload of electronic statement facility can be used for upload of quarterly e-TDS/TCS statements (F.Y. 2005-06 Onwards), e-TDS/TCS returns upto F.Y. 2004-05 and Annual Information Return (AIR) (F.Y. 2004-05 Onwards). This facility is available only for entities who possess a valid reformatted 10-digit TAN. Entities having old TAN or who have not yet been allotted a reformatted 10-digit TAN cannot upload their e-TDS/TCS statements directly to the TIN central system through the internet.

  • Electronic statements (e-TDS/TCS/AIR) can be uploaded online to the TIN central system only for those TANs who have been associated with the organisation and duly authorised by NSDL.
  • A user can upload electronic statements online only for TANs associated with it.
  • Electronic statements should be prepared as per the data structure prescribed by the Income Tax Department (ITD). The data structure is the same as prescribed by ITD for furnishing of electronic statements through TIN-FCs.
  • After preparation of the electronic statement, entities have to verify the electronic statement through the latest version of File Validation Utility (FVU) provided by NSDL which can be freely downloaded from the TIN web-site. The upload file generated by the FVU is to be uploaded online.
  • The length of the filename should not be more than eight characters. The filename can be alphanumeric. No special characters are allowed in the filename (e.g. name of the file can be: Form27E.txt).
  • The user will login to the TIN central system by signing with the DSC associated with it. On authentication of the DSC, the user will get access to the online upload system.
  • After successful login, the user will select Upload option from the main menu. The user will have to choose sub-option ‘TDS/TCS’ and upload the electronic statement online to the TIN central system by digitally signing the upload.
  • If DSC authentication fails the electronic statement will not be uploaded.
  • The status of the electronic statement uploaded can be viewed by selecting File Status from the main menu.
  • After upload of the electronic statement the TIN central system will perform format level validations, check the TAN – User ID association. In case electronic statement is invalid or the TAN (for which the electronic statement was uploaded) is not associated to the user i.e. user uploads an electronic statement online for a TAN which is not associated with it, the electronic statement uploaded will be rejected. In case of an accepted electronic statement a Provisional Receipt will be generated which will contain a Provisional Receipt Number / Token Number and will also indicate count of missing/invalid PANs. The deductor can view/print the Provisional Receipt.
  • Entities using the online upload of electronic statements facility will not submit Form 27A, CD / Pen drive for accepted electronic statements to TIN-FC or NSDL.
  • This facility is not available for online upload of electronic statements for Form 24 for those entities who have to submit physical certificates for No / lower deduction of tax and Form 12 B with respect to any of their deductees.
  • In case the entity is not able to upload its electronic statement using the online upload of electronic statement facility to the TIN central system, it may submit the same at any of the TIN-FCs by following the prescribed procedure for furnishing of e-TDS Statements with TIN-FCs.

Interest on late deposit of TDS – 3 % for delay of one day

Interest on late deposit of TDS is applicable @ 1.5 % per month or part thereof. The period for delay is taken from date of deduction to date of deposit. So, in specific cases a delay of one day may lead to pay interest @ 3 % . 

Suppose:

  • TDS deducted on 01.08.13. 
  • In this case, due date will be 07.09.13. 
  • If we deposit tax on 08.09.13, one day delay. 
  • Interest will be applicable for 2 months – From 01.08.13 (date of deduction) to 08.09.13 (date of deposit) for two months @1.5 % p.m=3% 

Tax deductors who default in depositing TDS by due date shall be liable for prosecution: CBDT

Central Board of Direct Taxes (CBDT) issued a press release in which CBDT said that tax deductors who deduct TDS but does not deposit the same into the Government Account within the stipulated time period are liable for prosecution under section 276B of the Income Tax Act, 1961.

The defaulters if found guilty or convicted, may be sentenced to rigorous imprisonment (RI) for a term which can extend upto seven years. The offence u/s 276B of the Income Tax Act can be compounded by Chief Commissioner having jurisdiction on the case, either before or after the launching of prosecution proceedings.

The Central Board of Direct Taxes has substantially modified existing guidelines stating that “the criterion of minimum retention period of 12 months has been dispensed with”.

For the benefit of public at large, it is now clarified that defaulters, who have retained the TDS deducted and failed to deposit the same in Government account within due date, shall be liable for prosecution, irrespective of the period of retention. Thus even a day of delay in deposition of TDS could result into rigorous imprisonment.