Tax Advocate Pachamuthu
(Querist) 10 March 2014
This query is : Resolved
One of my client wrongly deducted TDS as 1% instead of 2% for the FY 2012-2013 as my client is partnership firm 2% is correct. The contract party has filed the IT Return for the FY 2012-2013. Income Tax Department sent notice for short deduction for 1%. Please give me suggestion on my client point of view whether tds to be deducted and paid.
The contractor is not accepting to deduct TDS now as he is claiming that already he has paid Self Assessment Tax and filed the IT Return for AY 2013-2014.
(Expert) 11 March 2014
let the short deduction of tds be paid immediately. file revised tds return also. Impact of Non-compliance to TDS is severe as shown below: Disallowance u/s. 40(a) (ia) of Income Tax Act, 1961 (Act) Raising of demand u/s. 201(1) of the Act Charging of Interest u/s. 201(1A) of the Act. Levying penalty u/s. 271C of the Act.
ask the party to file revised return.still time is available. the party at default can make good the cost of late compliance .
Rectification u/s 154 is also possible if the conditions are satisfied as below:
Rectification application maybe filed u/s 154 of the Income Tax Act by the taxpayer in case of any mistake apparent from the record. An Income Tax authority may: a) amend any order passed by it under the provision of this Act b) amend any intimation or deemed intimation under sub-section (1) of Section 143. Subject to the other provisions of this section, the authority concerned, a) may make an amendment under sub-section (1) of its own motion, b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee. Pre-Requisites to file a Rectification- 1. The Income Tax Return for the Assessment Year should have been processed in CPC, Bangalore. 2. An Intimation under Section 143(1) OR an order under Section 154 passed by CPC, Bangalore for the e-Filed Income Tax return should be available with the taxpayer. 3.For Electronic returns filed and processed at CPC, only online rectifications will be considered. 4.If the refund arising out of return processed at CPC is adjusted against the demand of other Assessment Years and then the assessee is challenging the demand itself, in that case i) Rectification application has to be filed for the demand year, if the demand was raised by CPC then online application has to be filed ii)for the demand raised by the Field Assessing Officer, the application has to be filed before him. 5.No rectification has to be filed for giving credit to taxes paid after raising the demand.To file your Rectification, you should be a registered user in e-Filing application.
Rajendra K Goyal
(Expert) 11 March 2014
Well advised by the expert RV RAO ji, agree to it.