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Urgent tax doubt

Narayanan (Chartered Accountant) (189 Points)

08 January 2011

A company has got a TDS notice for short-deduction of TDS for assessment year 2008-09. Form 16A for that year has also been given to the other party only at such short rate. The other company has already filed its return for that year, after considering the short paid TDS, and filed its return, after paying the balance dues. Now, should the defaulter company pay the short deducted tax because of the notice, or can it issue a certificate from the other company that all dues have been paid by that company. Is there any similar case law?

Can someone also enlighten me on "interest on delayed TDS" consequences? Pls answer at the earliest... its urgent....

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CA Sandeep Kumar (Audit Assistant) (804 Points)
Replied 08 January 2011

refer- CIT v.s Rishikesh Apartments Co-op Housing society Ltd (2002) 253 ITR 310 (Guj HC)

CIT v.s Adidas India Marketing Pvt Ltd (2007) 288 ITR 379 (Del HC)

In your case i would opine that since the tax has already been paid to department, interest need not be paid, it is only my opinion.

Consequences for non deduction or failure to pay after deduction

Interest u/s 201(1A)

penalty u/s 221

penalty u/s 271C r/w 273B

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Ramesh (CA final) (53 Points)
Replied 08 January 2011

similar case law for this issue is "

M/S Hindustan Coca Cola Beverages Pvt. Ltd.

interest on delayed TDSundefined consequences is as under

Sec 201 (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,undefined

(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid,

and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200.]

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