Penalty for late payment of TDS

Dear Sujit,

Penalty can be imposed u/s 271C...

But  if U satisfy the officer that u had reasonable cause then penalty cannot be imposed..

 Hi Sujit,

If the TDS is deposited by Cheque then the date to be accounted for is the "DATE OF PRESENTATION" of challan and cheque in the bank. If you observe bank always stamps two date i.e date of presentation and date of clearing. For tax purpose the relevance is for date of presentation since the client himself has entered a wrong date tthen department can proceed with the penalty. You can produce a copy of challan deposited by you in support of your arguement n therby youur penalty may be waived off.

Penalty is levible U/s. 201 and 221 ; See these section.

201 Consequences of Failure to deduct or pay and

221 Penalty payable when Tax in default 

Provided that no penlaty shall be charged under section 221 from such person, unless the A.O is satisfied that such person without good and sufficient reasons, has failed to deduct and pay such tax.

So you have to satisfy officier with reasons.......

wat Tushar says is also correct.........Date of presentation of challan to the bank is to be consideded ........

Dear Tushar & Radhika,

What u r saying that Date of presentation of cheque is considered as date of payment...This concepts works in Indirect Taxes because of a specific circular, but I don't think there is any such circular in Income Tax..

Further clear reading of Sec 200 says that date of clearing will be date of payment

Well Aamir section u quote is correct.......its credit to the central govt.......the day we submit challan to the bank it gets credited to the govt subject to clearence of cheque............so tender date is to be consider....Correct me if i m wrong........

Dear Friends,

Read this-

TAX DEDUCTION AT SOURCE - SOME COMMON DOUBTS :: The Supreme Court in the case of CIT v. Ogale Glass Works Ltd. [1954] 25 ITR 529 held that the cheques not having been dishonoured but having been cashed, the payment related back to the dates of receipt of the cheques and in law the dates of payments were the dates of the delivery of the cheques, The same is the postition as per rules 79 and 80 of the Central Treasury Rules. However, with effect from June 1, 1983, rule 20 of the Central Government Account (R & P) Rules, 1983 has been substituted for the Central Treasury Rules in respect of all transactions pertaining to the Central Government. This said rule reads as under : Government dues tendered in the form of a cheque or draft which is accepted under the provisions of rule 19 and is honoured on presentation shall be deemed to have been paid - where the cheque or draft is tendered to the bank - on the date on which it was cleared and entered on the receipt scroll. The AAR in P.No. 2 of 1994 in Advance Ruling No. P. 2 of 1994, In re. [1996] 221 ITR has upheld the applicability of C.G. Account (R & P) Rules to income-tax payments., [2001] 116 TAXMAN 16

Dear All

thanks for the reply.

One fact to be added:

the TDS was under section 194C.

Under what sections penalty is involved?

Sec 271C doesnot deal with default in pamynet of TDS u/s 194C.

I think only Sec 200 and Sec 221 are relevant. Am I correct?

YES.........

 i do not think that penalty will be impose from my point of view only interes twill be charged @ 1%pm