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Notice u/s 143(1)

Manisha g (Ca final) (153 Points)

26 March 2010

Hi Everbody,

I have received notice from IT Dept u.s 143(1) for additional tax payable of Rs.540.I have income from my salary and TDS has been already deducted by employer.Tax paid by me is Rs.9,977 and tax payable shown by A.O is Rs.9963+Edu cess 289+Interest us 234(c) 592.total Rs.10,154.

My concern is how A.O. can charge interest u/s 234(c) if my employer has already deducted tax.

I have filed return before due date.

How should I reply to A.O.

please help me

Thanks

Manisha

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10 Replies

C.Balaji (Learner) (1867 Points)
Replied 26 March 2010

Dear Manisha.........

Interest u/s 234C - for deferrement of Advance Tax...........

Advance tax for individuals is payable in 3 installments....i.e.before 15th sep, 15th Dec and 15the March......

The Advance tax liability arises only when the tax payable by the assessee is Rs.5000 or more......

Since the tax payable by U is more than Rs. 5000 - 234 C is applicable.............

Manisha g (Ca final) (153 Points)
Replied 26 March 2010

I know provision of Sec234(c).If my employer has already deducted tax from salary within a year where question arises to levy interest us234(c)?

Is A.O. action is valid?

Manisha

Aditya Maheshwari (CA in Practice) (35857 Points)
Replied 26 March 2010

I think there is some mistake in the figures part as your state that tax payable shown by A. O. is Rs. 9963 + Edu cess 289 + Interest us 234C 592 = total Rs. 10,154 where as the total should be Rs. 10,844.

Any how so no interest can be charged by A. O. u/s 234C if entire credit for TDS has been given since then the balance tax payable will be Rs. 275 only which should pe paid. You should write a letter to the A. O. to rectify the intimation received specifying the facts of the case.

nilesh dube (Service ) (74 Points)
Replied 26 March 2010

i think in your case Monthly TDS as required to be deducted by your employer are short deducted in the respective months. As in your case the total tax payable for the period is Rs.9977 /-, advance tax required to be paid in your case is as follows

by 15th sep : Rs 2993

by 15th Dec : up to rs Rs 5986

by 15 th march ; up to Rs.9977

So you check your form 16 and verify the amount of TDS deposited by your employer by this date and accordingly calculate the interest u/s 234C.

If your employer has deducted and deposited the correct TDS amount by this date then Interest u/s 234C is not applicable, otherwise it can be charged.

karthikeyan.v (Chartered Accountant) (523 Points)
Replied 26 March 2010

dear manisha

i agree with CA nilesh

karthi

Manisha g (Ca final) (153 Points)
Replied 26 March 2010

Thanks Aditya and Nilesh for your advice.

Is there any spcific format to present explanation before A.O?

Thanks

Manisha

karthikeyan.v (Chartered Accountant) (523 Points)
Replied 26 March 2010

dear manisha

there is no specific format, you have to work out the computation of the tax labiality and present a revision petition to the assessing officer under sec 154 , he will revise the order

karthi

Manisha g (Ca final) (153 Points)
Replied 26 March 2010

Thanks karthi

Manisha

Piyush Jain (CA) (283 Points)
Replied 27 March 2010

Manish, i will suggest that you take the ITNS (income tax note sheet) from your ward. Accordingly you will come to know how the department has calculated the interest u/s 234c.

if there is any mistake from the department you can send a intimation to the department and make sure you get the acknowledgement.

If the department do not response in six months then it is deemed to be rectified.

Regards

Piyush

mazharpatel (service) (40 Points)
Replied 28 March 2010

I have also received similar intimation asking me to pay tax u/s.234c. My taxes have been paid by my employer. Even the intimation says Prepaid tax Rs.1609 , Tax Rs.1562 & Edu cess Rs.47, so no payable. And then it mentions interest payable by me Rs.469 u/s.234C. I have check Form 16 & every month before 5th, from June to Oct TDS of Rs.300/- has been deducted and Rs.109/- is deducted on 7th April 08. So I dont think there is any deferment of payment of Advance Tax. Also my return is filed on 22.07.2008 within due date. It seems there is some system error due to which this figure u/s 234C is reflecting. Can anyone send me a draft u/s.154 which I can forward to A.O or how should I define the above error in I.T. terms.