urgent ! tds & service tax default

This query is : Resolved

DEVAKI (Querist)
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20 June 2009 hi,
any body please tell me what are the consequenses for not filing TDS & service tax returns.
which sections should i refer or which IT rules i should refer?
please help me.
thanking you.

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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20 June 2009

The Income Tax Act imposes heavy Interests and Penalties in case of a person who defaults in payment of any amounts to the Govt. collected on account of Tax Deducted at Source.

The penal provisions state that if any person responsible for deducting tax at source, 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, without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default in respect of the tax. The said penal provisions are equally applicable to an employer who has paid the tax on non monetary perquisites provided to the employee.

However it has been justified that no penalty shall be charged under Section 221 from such person, principal officer or company unless the Assessing Officer is satisfied that such person or principal officer or company, as the case may be, has without good and sufficient reasons failed to deduct and pay the tax.

In furtherance of above if any such person, principal officer or company 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 @ 12% per annum (1% per month) on the:

Amount of such tax from the date on which such tax was Collectible to the date on which the tax was Actually paid.

In addition to above such interest shall be paid before furnishing the Quarterly Statement for each quarter in accordance with the provisions Section 200(3). In case of non payment of tax as aforesaid after its deduction, the amount of the tax together with the amount of Simple Interest thereon shall be a Charge upon all the Assets of the person, or the company, as the case may be.
SUMMARY OF PENAL CONSEQUENCES
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Nature of Default Penalty Officer who shall impose penalty Penalty Charging Section

Failure to deduct the whole or any part of the tax deducted at source as required under Sections 192 to 206B in Chapter XVIIB of the Income Tax Act.

Sum equal to the amount of tax which was due for deduction but was not deducted.
Joint Commissioner Section 271C

Failure to deliver or cause to be delivered on time, a copy of declaration in Form No. 15G/ 15H as per Section 197A.

Rs. 100 for every day during which the failure continues but the penalty shall be restricted to the amount of tax deductible.
Chief Commissioner Section 272A(2)(f)

Failure to issue TDS certificates u/s 203

Rs. 100 for every day during which the failure continues.
Joint Commissioner Section 272A(2)(g)

Failure to furnish the Statement required under Section 192(2C) relating to payment of tax on non- monetary perquisites of the employee

Rs. 100 for every day during which the failure continues.
Joint Commissioner Section 272A(2)(i)

Failure to deliver or cause to be delivered on time, a copy of the Quarterly statement within the time specified u/s 200(3)

Rs. 100 for every day during which the failure continues but penalty restricted to the amount of tax payable.
Joint Commissioner Section 272A(2)(k)

Failure to deliver or cause to be delivered on time, a copy of the Quarterly statement within the time specified u/s 206A(1)

Rs. 100 for every day during which the failure continues
Assessing Officer Section 272A(2)(l)

Failure to apply for allotment of TDCAN (Tax Deduction Account Number) and failure to quote TDCAN in challans, certificates and statements or quote a number which is false, and which he either knows or believes to be false or does not believe to be true.

Rs. 10,000
Assessing Officer Section 272BB

Failure to pay tax deducted at source to the credit of Central Govt.

Punishable with rigorous imprisonment for a term of atleast THREE months, which may be extended to SEVEN years along with fine.

Previous sanction of Commissioner. Section 276B

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