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Demand by ITO (TDS) for shortfall in tds deduction

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This query is : Resolved

M.R.KANNAN

M.R.KANNAN (Querist)

18 March 2008 Whether demand can be raised by ITO (TDS) for non deduction / shortfall in deduction of TDS by an assessee?

If so, whether any time limit exists for raising such demand. How far back he can go? For example, can he raise demand in 2008 for default in deduction of TDS in FY 2003-04? [The problem is that the payee can not claim credit for such belated deduction of tds (even on the basis of form 16A), if the filing of revised return is time barred or disabled (owing to non filing of original return in time), even assuming that this otherwise provides a valid ground for filing a revised return]

Will this not amount to double payment of tax, if the payee had made good the shortfall by himself paying the advance tax?

CA Shailesh +91 9393926464

CA Shailesh +91 9393926464 (Expert)

18 March 2008 The tax which the payer has not deducted is ultimately collected from the payee. Hence, the demand raised for non deduction/short deduction is harsh on the payer.

In my opinion, Law provides only for collection of Int & Penalty for non-compliance of TDS provisions

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