TDS Challan - disputes in date of payment

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Querist : Anonymous (Querist) 26 November 2010

It is noticed by a deductor through search on “Challan Status Enquiry” on TIN-NSDL that the date of depositing many challans of TDS reported by the recipient bank is much later than the actual date. This is causing mismatch in challans mentioned in e-TDS Statements and the entire amount of tax paid is shown as dues in notices from Income-tax Department. If it is matched by the AO or the deductor files a Correction Statement with the dates shown by the bank, it would result in wrong admission of delay in payment of TDS and claim/demand of interest for delay in paying TDS.
What is the remedy available to the deductor.

Aditya Maheshwari (Expert)
26 November 2010

There would be two remedies:
1. Check the challan status before filing the etds return from the nsdl site

2. Go for epayment where challan is generated instantly and there is chance of mismatch of any date.

Querist : Anonymous (Querist) 26 November 2010

Well, thanks for the suggestion.
But the reply has missed the real issue - i am seeking for a remedy for what has happened in past - how to correct the anomalies.

Aditya Maheshwari (Expert)
26 November 2010

file revise etds return for the same now.

Querist : Anonymous (Querist) 26 November 2010

Thanks Aditya,
It seems the real point of question is not clear. The remedy you suggested is very much in my question, please see the qn well. in the fifth line of the qn. it is said "If ... deductor files a Correction Statement...".
My qn is that how could the challns match if i put actual dates of deposit in the e-tds return/statement? and if the dates are mentioned in etds statement as per the dates put by the bank on OLTAS (to make them match), the deductor would be held liable for intt & penalty .... and the background is that the bank has filed the wrong dates of depositing challans - which are 4 or 5 months later than the actual dates.
Please suggest only if any expert has real solution... otherwise please don't answer for the sake of saying anything and declare the query as resolved.

Aditya Maheshwari (Expert)
27 November 2010

What your query really meant to me was that the TDS challans do not match with the data in the NSDL and hence the deductor is not getting credit for the same and the challan status remains unmatched. So there is a demand and penalty being raised by the department for non payment of TDS whereas now it has been clarified by you that the main question is for interest on delay for which you were not a defaultee.

At the very outset normally no bank would never put a date which would be 4 -5 months after the date of deposit previously also because if that is the case then you cannot file your quarterly etds return without getting challan from the bank. I do agree that State Bank of India used to take 3 - 4 weeks to give the challan copy so if you state 4 - 5 weeks then its ok.

Now coming to your actual query regarding payment of TDS. In your case you have paid tax in time though you do not have a challan supporting your claim. So there is a case law for the same which is produced below:

The decision of the GOI in Sahara Airlines v CCT (110 Taxman 378) and P. L. Haulwel Trailers Ltd. v DCIT (100 ITD 485) decision of the Chennai Tribunal the date of presentation has been considered as the date of payment.

SO this will help your cause. Also your have eveidence with your bank statement that the payment has been debited in your account long back although the challan date mentioned is wrong by the bank. So you have evidences to show that you were not a defaulter in this case and hence you cannot be called upon to pay interest and penalty for no delay by you.

I think now your query is solved. However am keeping it open for you to reply and for views of other experts on the same also.

Ram Avtar Singh (Expert)
27 November 2010

May be you are mentioned wrong challan which is paid in future month. Please traceout your exect challan for that period. and match with bank statement. you will find your recored is ok and you are wrongly looking wrong period challan.

Querist : Anonymous (Querist) 27 November 2010

Thanks Ram Avtar and Aditya.
The reality is that the practice of matching the payment of challans referred to by a deductor in Qly Statements is totally online - there is nobody to see the dates given on challan. Perhaps the AO has also limited role in this, as yet.
What have I felt that if the challan details (No and date)provided by the two persons - 1. reported by deductor in QSs and 2. the bank, it results, firstly, in showing the deposited TDS as unpaid holding the depositor liable to pay the amount. and if it is tried to be matched personally by the departmental authorities, it is the date of deposit reported by the bank which is considered for reckoning delay in payment of TDS and so, the deductor is held liable to pay interest (which may have more consequences in future). All this happens automatically. That is why the question.
This is why and also like that there are cases in which the claim of TDS by many persons in the return of income is not readily accepted the the AO in past 2-3 years in spite of the fact that the TDS was deducted and the deductor had paid the TDS and filed the TDS returns/statements.

Aditya Maheshwari (Expert)
27 November 2010

What you have mentioned in the last post is a practical difficulty and to which till date there is no solution with the department than to give credit on production of original TDS certificate. No other option to match TDS as claimed.

As regards the liability of the deductor you can always show with relevant documents that payment was indeed made in time and the delay was from the banks point of view and not your side and the assessee is not called upon to pay again the tax interest or penalty on the same.

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