How to reply the TDS notices received for Interest and Penalties? - Professionals - Taxation - TIK Share
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How to reply the TDS notices received for Interest and Penalties?


CA Pulkit Sharma

2013-12-23

Now days most of the assesses are getting TDS notice. Due to things going online, its easy for the department to automatically generate notices even if the default is for Rs. 100.

So, you have received a notice!! Next what?

First step to do is inspect the notice, and see under which section you received the notice. If its for the Interest or Penalty.

Here we will discuss the notice received for late filing and penalty demanded u/s 234E.

The procedure to reply the notice is:

In the notice check whether the late filing penalty is for form 24Q or 26Q etc.

Than pay the penalty using the form and mentioning the proper section, suppose you received notice for 26Qm, than select 94j, 94c or applicable section and pay the penalty.

Once you pay the penalty, first step is done.

Next step is download the RPU file to revise the original return. Fill the challan details and submit the return.

Once the return is submitted, its done. The systems at CPC will be updated and the penalty will be automatically removed from systems.

Remember only paying penalty will not clear your defaults from CPC servers, you need to revise the returns to update your TDS details available with department.

CA Sundeep Kamath

2013-12-23

The suggestions you have provided is for compliance.

Is there any way to contest the departmental levy.

 

The Rule for payment of TDS is justified, and late payment invokes a levy of interest. Mere filing of return belatedly will attract interest is not justified. A nominal levy would have been fine, however a levy of 200 per day undersection 234E is not justifyable

 

Ex: a Client having Rs. 500/- as TDS, the return is filed on 20th instead of 15th for the subsequent quarter, the levy of interest U/s 234E is maximum Rs. 200 per day or up to tax amount i,e Rs. 500/- Is it justified..?

 

I seek your valuable input to this.

 

Regards

CA.Sundeep S Kamath

 

Reply

CA Pulkit Sharma

2013-12-23

@Kamath

I need some valuable inputs.

One of client got notice for 2011-12. The returns were filed in may 2013. The penalty amount is 53000 and 44000.

Is there any way we can plead to lower the penalty?

Reply

Ganesh babu k

2013-12-24

Even in our case also one of our client got a notice for 1 lakh

.

.

There is no chance for avoiding this,,it is definetely required to be paid as department as of now not provided for any chance of waiving this Fee under section 234E

Reply

CA Sundeep Kamath

2013-12-28

I beleive a write petetion in the High court of would do to attrest the mischef of the law. Though the provisions were to cause of ensuring compliance, the procedureal lapse in carrying the justice would not penalise in a manner that would be implicit the cause.

 

The penal provisions have been drafted without much due care and has not be reasonable in case considering the anomolity of introduction of such harsh rules without a justifyable frame work. If all the cases of levy under 234E are brought together, a contest of same may be made based on liability determined and a review of same by a advocate with tax pratice stream.

 

Regards

S kamath

Reply

Vedanta Deshika

2013-12-31

First of all we need to understand Sec 200A in depth

TDS statements can be processed only for

1. SUMS DEDUCTIBLE

2. Arithmentical Error in TDS statement,

3.INTEREST 

4. AMOUNT REFUNDABLE OR PAYABLE after adjusting it with that paid under Sec 200 or 201.

INTIMATION has to be sent within one year from the end of FY

Now, lets analyse the legal validity of late fees of Rs 200 per day u/s 234E

Late fees prescribed under Sec 234E can not be brought under any of the above clauses, it is neither a penalty, not intrest nor due to any arithmetic error nor payable u/s 200/201.

Hence Intimation u/s 200A cannot be sent for this late fees

 

Now, lets understand another section Sec 204 of IT Act,

The section clearly specifies the persons responsible for Sec 190 till Sec 203 ( i.e. foregoing provisions of the Chapter) and Sec 285 .

Sec 234E is no where governed by Sec 204. Hence, no person is responsible u/s 234E ( legally speaking)

Therefore, none can be held responsible for not paying LATE FEES under this section.

Hence Demand u/s 156 can also not be issued.

Now, if you have recieved intimation us 200A, what you can do is

1. Apply For rectification u/s 154 online or

2. File appeals before CIT (appeals) if 154 application is rejected or

3. Directly file appeals to CIT (appeals0 without filing  154 application 

 

Reply

Vedanta Deshika

2013-12-31

 

As per mu knowledge, RPU software allows you file delayed returns without paying late fees.If the TIN-FC is accepting your Quarterly returns without payment of late fees, then you can go forward and file it.

Reply

Sofia Mulla

2014-03-14

Respected Sir,

Is It mandatory???  Bcz Many of my clients have received eTDS notice of penalty demanded            u/s 234E

Actually they made payment after due date of filing eTDS Return (eg. 2nd QTR - Due Date is 15/10/12, payment done - 22/10/12 , return filed - 15/1/13 ) that's why eTDS return also filed after due date. so here demand is Rs.10,200/-

penalty demanded u/s 234
penalty demanded u/s 234

What needs to pay it???

plz reply me soon...

 

Regards,

Sofia

Reply

CA Pulkit Sharma

2014-03-14

@Sofia

Its compulsory to pay the late filing fees. Its just like exam late fee in our institute, to give exam you have to pay the late fees.

Similarily you have to pay late filing fees. There is a difference between late filing fees and penalty, incase of penalty the amount can be reduced by department but fees can not be reduced.

Reply

Sofia Mulla

2014-03-14

Sir,

Before some days The Kerala court had given stay order on late filing penalty, thereof what happened??

Bcz i have received some notice of FY 2011-12 Form 24Q, Here Demand Amount is around 1.50lac bcz of we had taken wrong pan number of employees, now we can't change these pan number so in that condition what should i do??????

Reply

CA Pulkit Sharma

2014-03-14

The stay order is granted but the decision does not say that late fee is wrongly colllected. Regarding correcting the PAN, you can do it by filing the correctional statement.

Please read 200A TDS Intimation for late filing penalty-fee us 234E-How to pay and what is procedure

Reply

Sofia Mulla

2014-03-14

Sir,

I know how it is done but i don't know about correction of pan numbers.

(Eg. suppose,

i) In Form 24Q I took wrong pan number of employee & there tds amount is 80000/- that time can I rectify in these pan number?? (All digits are wrong)

ii) In Form 26Q I had taken wrong pan number, when client given correct pan number, I had revised,also they consider my correction statement but nevertheless they send me default notice for short deduction (means pan number issue - 20% deduction)

In that situation, should I pay this amount(short deduction)?? or should I meet officers? What I should do??

Reply

CA Pulkit Sharma

2014-03-14

@Sofia,

Even if all digits in PAN are wrong you can correct it.

Regarding form 26Q, file forms with whatever TDS is deducted. Notice is to be sent by department, let them send if they think it appropriate.

The basic thing to do is to file the correct TDS return otherwise whole TDS will be credited to wrong accounts and clients who does not credit will eat more time than department.

Reply

CA Sundeep Kamath

2014-03-15

Pulkit,

The karnataka High court has upheld the writ petition vide reference no. WRIT PETITION NO 6918-6938 /2014 (T-IT) dated 19.02.2014 and Any actions taken against the order of court pending hearing will be a contempt of court.

You can bring action against the officer in charge for issuance of notice or procedings pending ruling of court order as violation of courts order.

 Hope things are clear and levy as well as collection is invalid until the court ruling is expressed by way of judicial judgement.

 

Regards

S Kamath

Reply

CA Sundeep Kamath

2014-03-15

Sofia,

My advice in case the PAN correction not allowed in FUV, please visit the Income tax TDS Ward 16(3)  at HMT Bhawan at Bellary Road and get to talk to either the Inspector or the AO. I assure though no help will turn, however a greviance in writing addressing to the AO along with brief particulars of facts with underlying documents and a covering letter should be of help.

The key would be to take a acknowledgement from the concerned official and later send the same set of documents to the CPC, TDS center with of copy of acknowledgement of the same at AO ward 16(3). Please send vide Acknowledgement due vide post to Ghaziabad.

Let the department reply, rather we all getting worried on the task, which the solution seams to be bleak. However if you have not received the reply either from AO or the TDS CPC, please approach the Asst. Commissioner with again an acknowledgement from him on day of visit. I assure you atleast by regular visits to department definately 6 months the things should be on track.

 

Regards

S Kamath

Reply

priyanka bharuka

2014-12-18

Hi...

My builder have paid TDS for me...i have got the receipt which have some interest amount. i want to know hwat is the meaning for tis interest amount. doest it mean its a late fee or anything else.

Scondly builder is also quoating some professional amount to pay on addition to tds..this amount is not paid separately. this is shown in Challan receipt in basic amount. 

Can you tell me what is professional cost?

 

please help me on this

Reply

CA Pulkit Sharma

2014-12-18

Hi Priyanka,

Details you provided are not complete. Can you please provide additional details regarding this matter.

However with the limited information you provided, my views are:

  1. You purchased housing property form your builder. As per Income Tax act, if you purchased immovable property for 50 Lakhs or more, TDS has to be deducted from the sale consideration.
  2. Your builder has paid tds which you were suppose to pay.
  3. Interest is paid, if TDS is remitted late to account of government.
  4. Professional fees is paid to tax consultant who provided consultancy regarding this matter.

Legally, you should not refund the TDS amount but only professional fees and interest. TDS was to be deducted from payment payable to builder.

For Example, if the total contract for purchase was for Rs. 60 Lakhs than total amount should be paid only 60 Lakhs including TDS.

Reply

CA Pulkit Sharma

2014-12-25

Hi Priyanka

Hope your doubt is solved from above post. Please do post for further doubts.

Reply

CA Pulkit Sharma

2015-03-01

Update:

The late filing fees which was challenged in high court is now resolved. Court has said that the levy is constitutionally valid. You can read the full update in the post TDS late filing fees 234E is now constitutionally valid

TDS late filing fees 234E is now constitutionally valid - See more at: http://www.tikshare.com/forum/showPost/1470/TDS-late-filing-fees-234E-is-now-constitutionally-valid#sthash.hNVTYrPy.dpuf

Reply

Kunal V

2015-03-17

PAN No. of one of our employees was wrong in the TDS returns for 2012-13 filed by our company. This happened because the employee had 2 PAN Nos. and one of these was cancelled.

We recently filed TDS revision for the PAN No. change. Subsequently we received notice under Sec 154 & 200A to pay Late filing fees and interest.

Can we challenge this notice, or is this valid?

Reply

Jack Goldy

2015-03-31

Hi Pulkit,

 

Can you guide me on the steps to follow for filinf late payment fee on TDS and interest payment of the same. I selected challan no. 281. But the fields like type of payment, Nature of payment etc are bit confusing. If possible pls give a step-by-step instruction.

Regards,

Reply

Jack Goldy

2015-03-31

This is for TDS on property, late fee and interest. How to pay online. No TAN available.

Reply

CA Pulkit Sharma

2015-03-31

For TDS on property TAN is not required. You can pay with your PAN number itself. Go to Income Tax website, click on E-Pay tax and select form 26QB.

Reply

Jack Goldy

2015-03-31

Thanks Pulkit. The issue now is how do I put only late fee and interest. If I fill the rest then I am making a double TDS payment.

Reply

akash vajpai

2015-04-25

FOR ANY TAX RELATED QUERY, YOU CAN MAIL ME AT AKASHVAJPAI24@GMAIL.COM. ANSWER WILL BE GIVEN IN 24 HOURS.

Reply

CA Pulkit Sharma

2015-04-26

Hi Akash,

Why don't you asnwer queries here itself. What is the need to mail?

Reply

Arun Singh

2016-04-14

Hi Pulkit,

I got a demand letter from TDS CPC for filing late TDS deposit for builder payments.

Actually I have taken loan and payment is done by Bank but through me. So I have deposited

TDS. Now what to do for this issue?

1. This is to give you a notice that a sum of Rs. 5230.00 has been determined to be payable by you in respect of the statement filed by you as above.
2. The sum has been determined u/s 200A of the Income Tax Act, 1961 in respect of the TDS statement as considered above.

Can you please provide me your number for discussing this!!

Thanks & regards

Arun Singh

 

Reply

Arun Singh

2016-04-14

Hi Pulkit,

I got a demand letter for TDS late payment as i bought the flat from builder, so there was some 2 months delay in paying it. The thing is I took loan and bank has to pay that but bank was paying TDS through me by giving me demand draft for TDS. I was out of country in between and thats why I was not able to access TDS website outside.

I filed this in 7th Feb and paid on 19th march an amount of 5000. so for 40 days it comes to 8000 but as total TDS was 5000 they make it as 5000 Rs. I checked your link and it is mentioned that it should be paid quarterly, so why this late levy levied on me?

1. This is to give you a notice that a sum of Rs. 5230.00 has been determined to be payable by you in respect of the statement filed by you as above.
2. The sum has been determined u/s 200A of the Income Tax Act, 1961 in respect of the TDS statement as considered above.

Interest on Late Payment :225

Late Filing Levy: 5000

what I have to do now, can it is possible to get relief from this.

Can you please share your phone number for communication, if you can.

 

Thanks & regards

Arun Singh

 

 

 

 

 

 

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