Income Tax : This guide explains the penalty and prosecution framework under the Income-tax Act for AY 2026-27. It highlights the consequences ...
Income Tax : The article explains how offences such as wilful tax evasion, failure to file returns, non-payment of TDS/TCS, falsification of re...
Income Tax : This article outlines major offences under the Income-tax Act that may result in prosecution, including tax evasion, non-payment o...
Income Tax : This article explains the statutory powers of the Principal Commissioner or Commissioner to waive or reduce penalties in genuine c...
Income Tax : This article outlines major penalties under the Income-tax Act for defaults involving tax payments, return filing, TDS compliance,...
Income Tax : The Tribunal ruled that non-deduction of tax pursuant to subsisting High Court directions cannot attract liability under Sections ...
Income Tax : ITAT Delhi held that territorial jurisdiction depends on the location of the Assessing Officer handling the assessment. Since the ...
Income Tax : ITAT Raipur held that penalty proceedings initiated after unreasonable delay violated the statutory limitation prescribed under Se...
Income Tax : Orissa High Court held that assessment order set aside as proceedings under section 148 of the Income Tax Act initiated without se...
Income Tax : ITAT Chandigarh upheld penalty under Section 271C as exemption under Section 10(5) applies only to travel within India, requiring ...
1. Prosecution etc. : U/s. 276B If a person deducts tax at source etc. but fails to pay the same to the credit of Central Government as prescribed, he can be sentenced to rigorous imprisonment for a term not less than 3 months and extendable upon 7 years with fine as well. Moreover, u/s 276BB, similar punishment is provided for a person who fails to pay to the credit of Central Government taxes collected at source u/s. 206C being a seller of alcoholic liquor for human consumption, Tendu leaves, timber merchant, dealer in forest produce and dealer in scrap etc.
Santur Infrastructure Pvt. Ltd. Vs ACIT (ITAT Delhi) We are of the considered view that firstly, the assessee was not required to deduct TDS as the payment of EDC was not made out of any statutory and contractual liability to HUDA with whom the assessee has no privity of contract; secondly, the assessee has reasonable […]
State Bank of India Vs ACIT (ITAT Bangalore) The assessee is a banking institution. A survey u/s 133A of the Act was conducted in the hands of the assessee in order to verify compliance of TDS provisions. It was noticed that the assessee has provided LTC facility to its employees and some of the employees […]
Understand the provisions of Section 271C of Income Tax Act, 1961 that impose penalties for TDS failure, non-deduction, or non-payment.
1. Disallowance of expenditure; u/s 40(a)(i) of and section 40(a)(ia), if Tax not deducted / not deposited till the due date of filing of return; a. Payment to Non-resident ;100% expenses disallowed b. Payment to resident ;30% expenses disallowed However, if tax is deducted or deposited in subsequent year, the expenditure so disallowed shall be allowed […]
Since assessee had deducted the TDS, but not remitted to Government account and for that he had not given any satisfactory explanation either before AO or before CIT(A), therefore, penalty under section 271C was justified.
According to Section 234E of Income Tax Act, a fee for late / non filing of the TDS Return is leviable at the rate of Rs. 200 per day for the period of failure (Not more than the amount of TDS).
Where assessee duly deducted tax at source under section 194C at the end of the year and remitted the same to Government account, the penalty imposed under section 271C for assessee’s failure to deduct tax at source and remittance to Government account, would not be sustainable.
Since assessee had a reasonable cause for non-deduction of TDS, penalty u/s 271C not leviable in terms of section 273B.
In Recent past we noticed that department has taken late payment of TDS very seriously and in addition to imposing Interest and Penalty for Late Payment, they also start initiating Criminal Prosecution against those responsible for Deduction and Payment of TDS.
