Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 January 2012 I am a company,

In form 16 manually made give correct amount credited ,but in 26AS amount credited is increase by 7 laks due to wrong quarterly return filed by company.
But amount of tds is correct ie. showing on the manual form 16.
Now after one year what the company can do, If company can,t revise the tds return then what is the implication in the point of view of company ? plz suggest with quote the section for reference ?

If answer is short deduction of tds but can i clarify to the department that quarterly tds return amount credited is wrong? then what action can take department for wrong amoung credited in quarterly return, Plz suggest ?

Thanks

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 January 2012 Department raise the balance tax payment from the Employer as default of short deduction of TDS

Querist : Anonymous

Querist : Anonymous (Querist)

25 January 2012 If answer is short deduction of tds but can i clarify to the department that quarterly tds return amount credited is wrong? then what action can take department for wrong amoung credited in quarterly return, Plz suggest ?

Thanks

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Here’s a detailed explanation for your situation:

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### Issue:

* **Manual Form 16**: Correct amount credited is shown.
* **Form 26AS**: Shows excess credited amount (7 lakhs more) due to wrong quarterly TDS return filed.
* **TDS amount deducted is correct**.
* **One year has passed**, and the company is unable to revise the TDS return.

---

### Implications for the Company:

1. **Section 201(1)** and **Section 201(1A)** of the Income Tax Act deal with **failure to deduct or deposit TDS** and associated interest and penalties.

2. Since the **amount credited is incorrect in Form 26AS**, the department may treat this as **short deduction or non-deposit of TDS** for the excess amount (7 lakhs). This can lead to:

* **Demand notice for short deduction/non-deposit** of TDS.
* **Interest liability under Section 201(1A)** for delay in deposit of TDS.
* **Penalty under Section 271C** (penalty for failure to deduct TDS).

3. The **company is responsible** for filing correct TDS returns. If revision is not possible after the deadline or assessment proceedings begin, the company may face action for **filing incorrect return**.

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### Can the Company Clarify the Department about Wrong Amount Credited?

* Yes, the company can **write a letter or representation to the assessing officer or jurisdictional TDS officer** explaining the error in the quarterly return and submit evidence (like the correct Form 16, payment vouchers).

* However, the **department’s reaction depends on the facts and merits**:

* If the excess credited amount is considered a **mistake**, the department may ask the company to file a **correction or revised statement** if still possible.
* If not possible, the department may **initiate proceedings for short deduction or non-deposit** of TDS for the excess amount.

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### What Action Can the Department Take?

* **Issue demand notice** for short deduction or non-deposit of TDS for Rs. 7 lakhs.
* **Charge interest** under Section 201(1A) for delayed payment.
* Possibly **impose penalty** under Section 271C.
* Start **prosecution proceedings** in extreme cases under Section 276B.

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### Suggestions:

* **Immediately consult a tax professional** to explore the possibility of revising TDS returns if allowed.
* **Maintain records** and prepare a detailed explanation to submit to the department.
* If the period for revision is expired, consider **voluntary payment of any demand** along with interest and penalty to avoid prosecution.
* Keep communication documented.

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If you want, I can help you draft a representation letter to the Income Tax Department explaining your case. Would you like me to prepare that?

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