Consequences of failure to pay TDS demand
Consequences of failure to pay the demand:
- In accordance with provisions of section 201(1) of the Act, where any person, including the principal officer of a company, who is required to deduct any sum in accordance with the provisions of the Act; does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall be deemed to be an assessee in default in respect of such tax.
- As per the provisions of section 220 of the Act,
- Any amount, specified as payable in a notice of demand shall be paid within thirty days of the service of the notice.
- If the amount specified in any notice of demand is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid.
- Any amount, specified as payable in a notice of demand shall be paid within thirty days of the service of the notice.
- If any person fails to deduct or pay the whole or any part of the tax, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay under Section 271C of the Act.
- Failure to pay tax to the credit of Central Government is punishable with fine as per the provisions of section 276B/ 276BB.
- Section 278A of the Act prescribes for punishment for second and subsequent offences, if any person has been convicted of an offence under section 276B.
Actions to be taken at the earliest :
- Download the Justification Report from our portal TRACES to view your latest outstanding demand.
- Use Challan ITNS 281 to pay the above with your relevant Banker or use any other Challan, which has adequate balance available.
- Download the Conso File from our portal.
- Prepare a Correction Statement using version 3.9 of the Return Preparation Utility (RPU) and version 4.2 & 2.138 of the File Validation Utility (FVU).
- Submit the Correction Statement at TIN Facilitation Centre.
- You can also use our Online Corrections facility on TRACES to submit corrections for FY 2013-14 onwards, after payment of the demand.
ICAI Clarification on High Court Order on VAT Act in State of U.P.
ANNOUNCEMENT ON COURT VERDICT PRONOUNCED ON 6 AUGUST 2014, BY THE LUCKNOW BENCH OF THE ALLAHABAD HIGH COURT ON VAT
This is with reference to the order passed by the Lucknow Bench of the Allahabad High Court in the matter of Tax Lawyers Association & Anr. v/s State of U.P. & Ors. whereby only registered advocates are permitted to appear before the Authority under the VAT Act in the State of U.P.
The Institute is seized of the matter and taking all steps to ensure that the status quo ante is restored in the matter and interest of the profession is preserved. As a first step, it is proposed to implead ICAI in the aforesaid matter as ICAI is not a party to the said case.
Incorrect reporting of Certificates U/s. 197 and action to be taken
Incorrect reporting of 197 Certificates: Please refer to the following guidelines for correct reporting of 197 Certificates:
- The Certificate Number should be of 10 digits with Alpha-numeric structure. Please refer to the following examples:º Correct Format 1111AA111A;
º Incorrect Format: 1111AA111A/194C - Certificate Number should be valid during the period for which it is quoted.
- The Certificate Number should be for the same PAN, Section Code and Section Rate for which it has been mentioned in the statement
- Threshold limit Amount of the Certificate should not be exceeded.
- Please ensure that the Certificate is not expired. Please refer to the following illustration:
º Lower deduction Certificate under section 197, issued in April 2013 (e.g. Certificate Number – 1) stands cancelled by Assessing Officer on 10/11/2013.
º A fresh certificate Under Section 197 (e.g. Certificate Number – 2) is issued with effect from 11/11/2013.
º Deductor quotes Certificate Number – 2 against the transactions recorded during the period from 01/11/2013 to 10/11/2013 in Q3 TDS statement.
º Deductor should have quoted Certificate Number – 1 for the transactions conducted till 10/11/2013.
Common errors resulting into Short Payment Defaults:
- Typographical errors committed by deductor, in reporting the date '20032014′ in the "Tax Deducted" column.
- Total of "Amount Paid / Credited" reported in the "Tax Deducted" column of the statement. This results into short payment and
Deductors need to ensure that the TDS/TCS Deducted/Collected amount should be equal to TDS/TCS Deposited Amount.
The above mistakes are illustrated below:
| Amount Paid/ Credited | TDS Deducted | TDS Deposited | Remarks |
| 1,55,000.00 | 1,55,000.00 | 15,500.00 | Wrong TDS Deducted Amount |
| 2,20,420.00 | 20032014.00 | 22042.00 | Date mentioned in the TDS Deducted Column |
Actions to be taken :
- CIN Particulars (BSR Code, Date of Deposit and Challan Serial Number) mentioned in the TDS statement should exactly match with the CIN Particulars as available on 'Challan Status' at www.tdscpc.gov. in or 'Challan Status Enquiry' at www.tin-nsdl.com
- For BIN (Book Identification Number), the particulars (24G receipt number, Date of transfer voucher and DDO Serial Number) mentioned in the TDS statement by the Govt. Deductors should exactly match with the BIN Particulars as available on
'Challan Status' at www.tdscpc.gov. in or 'BIN View' at www.tin-nsdl.com - Amount of Tax deposited pertaining to different BIN's/ CIN's should not be clubbed together while reporting in the TDS statements.
- Few other common mistakes in reporting dates are as follows:
| Actual Date of Deposit (As per Challan) | Date of Deposit mentioned in TDS Statement | Observations |
| 07/01/2014 (07th Jan, 2014) | 07/01/2013 (07th Jan, 2013) | Wrong Year (2013 instead of 2014) |
| 07/01/2014 (07th Jan, 2014) | 01/07/2014 (01st July,2014) | Wrong Date Format (MM/DD/YYYY) |
Compliance with all the conditions of section 220(2A) is a must to claim waiver of interest, rules HC
August 11, 2014[2014] 47 taxmann.com 287 (Kerala)
IT : While passing order under section 220(2A), Settlement Commission has to exercise its discretion judicially and satisfy that three conditions laid down under clauses (i), (ii) and (iii) of sub-section (2A) of section 220 have been fulfilled, before passing an order waiving interest
AHMEDABAD, AUG 11, 2014: THE issue before the Bench is - Whether when assessee discontinues manufacturing activities and commences trading from part of premises and also earns rental income by leasing out remaining part, it is entitled to set off business loss from trading against rental income on which Sec 24 benefit was also availe. NO is the HC's answer.
Facts of the case
The assessee was in the business of manufacture of air conditioners. The assessee had given building as well as land on lease for the production of printing inks and received total rental income at Rs.39 lacs. Assessee filed return of income declaring income. The assesse made a claim of expenditure under the head repair & maintenance. Assesse had also claimed traveling and conveyance expenses which were disallowed by itself in the computation of income. Except for these expenses consisted of remuneration to director, salary & wages, visiting fees, insurance expenses and interest expenses. Assessee had also shown sales against which cost of goods sold was shown. Assessee had also shown purchase of one AC, which had been shown as part of the closing stock. Assessee's case was processed under Section 143(1). The case was later selected for scrutiny assessment. Notice under Section 143(2) was issued, which was duly served upon the assessee. The assessee furnished computation of income as rental income under the head the income from house property and deduction claim under Section 24. The assessee also claimed set off business loss against the income from house property under Section 71 of the Act. The assessee was called upon to justify its claim of set off business loss against the income received from house property. Not satisfied with the explanation of assessee, Assessing Officer opined that as such there was no business or manufacturing activity carried out during the year under consideration and business loss claim and set off against the income shown under the head of house property was not allowable. Assessing Officer disallowed the claim of set off against the income from house property and added to the income of assessee.
In appeal, CIT(A) concurred with the findings of the Assessing Officer and dismissed the appeal. CIT(A) was of the view that the repairs and maintenance was the responsibility of the licensee after 1.4.2008 and hence the expenses shown as repair expenses by the assessee was not incurred for the purpose of the factory premises. Secondly, the payment of notified area committee was also related to his house property given on lease but still the assessee was claiming this expenditure under the head of income from business and profession. It was held that assessee had stopped its manufacturing activity and rented out the entire factory premises to other party still it was showing huge repair expenses to the factory in its books of accounts. It was held that due to the fact that the assessee was not carrying on any business activity, the expenses debited in the P & L account relating to director's remuneration, salary & wages, rent etc. have been incurred for the purpose of earning of house property income. Hence, the assesse's claim that all these expenses should be set off against the house property income was not acceptable as it would amount to allowing double deduction to the assessee.
In second appeal, Tribunal confirmed the orders passed by the Assessing Officer as well as CIT(A).
Assessee contended that Assessing Officer had materially erred in considering Rs.8,71,279/as business expenditure and set off claim by the assessee from the income received from the house property. It is submitted that as such the assessee claimed the business loss of Rs. 8,71,279/as set off from the income received from the house property as provided under Section 71 of the Act. It is submitted that therefore, the AO has materially erred in not properly appreciating the scope of ambit of Section 71 of the Act.
Having heard the parties, the Court held that,
++ there are concurrent findings of fact recorded by the all the authorities below that assessee incurred the expenditure of Rs.8,71,279/- as claimed and consequently loss suffered by the assessee to the aforesaid extent. There are concurrent findings of fact recorded by all the authorities below that as such assessee had stopped the manufacturing activity in the factory premises in question and started only trading activity of selling Air Conditioner and during the year under consideration sold only three A.Cs for an amount of Rs.45,000/. It is required to be noted that as such the factory premises in question, in which, the manufacturing activity was earlier carried was given on lease to one Rex-tone Industries Limited, Mumbai and assessee earned the rental income from the house property of Rs.22,50,000/. That the assessee claimed the benefit under Section 24 of the Act with respect to the rental income of Rs.22,50,000/. The assessee also claimed the business loss of Rs.8,71,279/- by submitting that the assessee had incurred said expenditure while doing the business and claimed that there was business loss of Rs.8,71,279/- and claimed set off of the said business loss from the rental income from the house property. On appreciation of evidence and considering the factual aspect all the authorities below have not accepted the claim of the assessee that it had incurred expenditure of Rs. 8,71,279/- while doing the business and consequently there was business loss to the extent of Rs. 8,71,279/- and therefore, did not allow set off claimed by the assessee from the rental income received from the house property;
++ we are in complete agreement with the view taken by the CIT(A) confirmed by the Tribunal. There is no error committed by the Assessing Officer or CIT(A) or Tribunal in disallowing the claim of set off claimed by the assessee of Rs.8,71,279/from the rental income from the house property claimed under Section 71 of the Act;
++ there are concurrent findings of fact recorded by all the authorities below not accepting the claim of the assessee with respect to the business expenditure of Rs. 8,71,279/and consequently the business loss of Rs.8,71,279/and set off the same claimed by the assessee from the rental income received from the house property.
The assessee was in the business of manufacture of air conditioners. The assessee had given building as well as land on lease for the production of printing inks and received total rental income at Rs.39 lacs. Assessee filed return of income declaring income. The assesse made a claim of expenditure under the head repair & maintenance. Assesse had also claimed traveling and conveyance expenses which were disallowed by itself in the computation of income. Except for these expenses consisted of remuneration to director, salary & wages, visiting fees, insurance expenses and interest expenses. Assessee had also shown sales against which cost of goods sold was shown. Assessee had also shown purchase of one AC, which had been shown as part of the closing stock. Assessee's case was processed under Section 143(1). The case was later selected for scrutiny assessment. Notice under Section 143(2) was issued, which was duly served upon the assessee. The assessee furnished computation of income as rental income under the head the income from house property and deduction claim under Section 24. The assessee also claimed set off business loss against the income from house property under Section 71 of the Act. The assessee was called upon to justify its claim of set off business loss against the income received from house property. Not satisfied with the explanation of assessee, Assessing Officer opined that as such there was no business or manufacturing activity carried out during the year under consideration and business loss claim and set off against the income shown under the head of house property was not allowable. Assessing Officer disallowed the claim of set off against the income from house property and added to the income of assessee.
In appeal, CIT(A) concurred with the findings of the Assessing Officer and dismissed the appeal. CIT(A) was of the view that the repairs and maintenance was the responsibility of the licensee after 1.4.2008 and hence the expenses shown as repair expenses by the assessee was not incurred for the purpose of the factory premises. Secondly, the payment of notified area committee was also related to his house property given on lease but still the assessee was claiming this expenditure under the head of income from business and profession. It was held that assessee had stopped its manufacturing activity and rented out the entire factory premises to other party still it was showing huge repair expenses to the factory in its books of accounts. It was held that due to the fact that the assessee was not carrying on any business activity, the expenses debited in the P & L account relating to director's remuneration, salary & wages, rent etc. have been incurred for the purpose of earning of house property income. Hence, the assesse's claim that all these expenses should be set off against the house property income was not acceptable as it would amount to allowing double deduction to the assessee.
In second appeal, Tribunal confirmed the orders passed by the Assessing Officer as well as CIT(A).
Assessee contended that Assessing Officer had materially erred in considering Rs.8,71,279/as business expenditure and set off claim by the assessee from the income received from the house property. It is submitted that as such the assessee claimed the business loss of Rs. 8,71,279/as set off from the income received from the house property as provided under Section 71 of the Act. It is submitted that therefore, the AO has materially erred in not properly appreciating the scope of ambit of Section 71 of the Act.
Having heard the parties, the Court held that,
++ there are concurrent findings of fact recorded by the all the authorities below that assessee incurred the expenditure of Rs.8,71,279/- as claimed and consequently loss suffered by the assessee to the aforesaid extent. There are concurrent findings of fact recorded by all the authorities below that as such assessee had stopped the manufacturing activity in the factory premises in question and started only trading activity of selling Air Conditioner and during the year under consideration sold only three A.Cs for an amount of Rs.45,000/. It is required to be noted that as such the factory premises in question, in which, the manufacturing activity was earlier carried was given on lease to one Rex-tone Industries Limited, Mumbai and assessee earned the rental income from the house property of Rs.22,50,000/. That the assessee claimed the benefit under Section 24 of the Act with respect to the rental income of Rs.22,50,000/. The assessee also claimed the business loss of Rs.8,71,279/- by submitting that the assessee had incurred said expenditure while doing the business and claimed that there was business loss of Rs.8,71,279/- and claimed set off of the said business loss from the rental income from the house property. On appreciation of evidence and considering the factual aspect all the authorities below have not accepted the claim of the assessee that it had incurred expenditure of Rs. 8,71,279/- while doing the business and consequently there was business loss to the extent of Rs. 8,71,279/- and therefore, did not allow set off claimed by the assessee from the rental income received from the house property;
++ we are in complete agreement with the view taken by the CIT(A) confirmed by the Tribunal. There is no error committed by the Assessing Officer or CIT(A) or Tribunal in disallowing the claim of set off claimed by the assessee of Rs.8,71,279/from the rental income from the house property claimed under Section 71 of the Act;
++ there are concurrent findings of fact recorded by all the authorities below not accepting the claim of the assessee with respect to the business expenditure of Rs. 8,71,279/and consequently the business loss of Rs.8,71,279/and set off the same claimed by the assessee from the rental income received from the house property.
No transfer under sec. 2(47) if share in inherited property was transferred pursuant to Court decree
August 11, 2014[2014] 47 taxmann.com 190 (Bangalore - Trib.)
IT : Amount received by assessee pursuant to a Court decree in lieu of her share in self acquired property of father who died intestate, could not be said to result in 'transfer' attracting provisions of section 2(47)(i) or (ii)
ITAT JODHPUR - Income Tax
Non-issuance of notice u/s 143(2) for the purpose of reassessment u/s 147 – validation u/s 292BB - Held that:- Any legal ground even if it was not raised before any authorities can be raised for the first time in case no further investigation of facts is required – relying upon NTPC Vs. CIT SUPREME Court] - the Tribunal has jurisdiction to examine the question of law which arises from facts as found by the Income tax authority and has bearing on the tax liability of the assessee, the additional grounds taken by the assessee are to be admitted - Without issuance of notice, no further proceedings can be pursued and completed by the AO - the AO has failed to issue requisite notice u/s 143(2) of the Act and this defect is not rectifiable u/s 292BB of the Act - the plea that the AO was not intimated about the vacation of the stay order and dismissal of the writ petition is of no avail – Decided in favour of Assessee.
__._,_.___
No comments:
Post a Comment