Tds [Resolved] | Income Tax #1045624

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2012 1)I had an Overdraft account in a listed NBFC Company.I paid interest other than interest on securites (RS 200000)to the company on 5th june 2010,5 th July 2010 ,and 5th august 2010 ; but did not deduct any tax(TDS).Later on 15 Dec 2011, I deposited TDS amount with interest(@12 p.a or 1 p.m) to government by way of challan.On 15 th Jan 2012,the company reimbursed me with the TDS amount.

2)Now assessing officer is trying tp prosecute me u/s 276 of the IT act for delay of more than 12 months for depositing the tax.Can he do so?

3)Background: I am an Investor and Trader (in securities) and my accounts are audited(since turnover from trading activity exceeds 80 laks).But i have utilized the borrowed capital for investment activity(for capital gains )for which deduction of interest is not allowed; and for which I was not liable to deduct TDS (in the first place) . However, my CA suggested me to deduct tax for "safety" since the assessing officer for IT could treat this investment activity as trading(business);and consequently at a later date i may have to pay this TDS amt with interest and penalty. On his advice, I immediately applied for TAN and paid the TDS amount with interest.(i have only 1 deductee to whom i pay interest other than interest on securites)
Now i am stuck with Prosecution notice.What should i do? do i have any legal recourse.

4)Will I have to pay any penalty?

Amol S Joglekar

Amol S Joglekar (Expert)

27 July 2012 Prosecution can not be used as punitive measure. You need to explain the facts of the case to the concerned officer under copy to Commissioneer.

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