Prosecution notices are valid, some TDS defaulter companies are misleading the actual fact, alleges CBDT

NewsBharati    21-Jan-2019
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Mumbai, January 21: Rubbing of the hearsay spread in amongst the media and people, regarding the TDS prosecution notices sent in en mass, the Central Board of Direct Taxes has stated that by any stretch of imagination, these notices cannot be termed as mass harassment by the income tax department.
 
 
“In a country of 130 crore people where around 6 crore returns are filed every year, only a total of 1400 prosecutions have been filed so far for various offences under the Income Tax Act during this financial year. Therefore, to say that prosecution notices en masse have been sent to taxpayers for minor defaults is completely incorrect and misleading”, said the board in its defence.
 
The CBDT has stated the same pointing at certain news items that appeared in a section of media regarding en masse issue of prosecution notices to small companies for TDS default. “Some defaulter companies and vested interests are deliberately misleading the media to thwart action against themselves”, it alleged further.
 
 
Clarifying the matter, it said that the Mumbai Income Tax TDS office has issued prosecution Show Cause Notices only in a limited number of big cases where the amount collected from the employees counting more than Rs 5 lakhs, as TDS was not deposited to the tax department.
 
Having deducted tax from employees and other taxpayers and not depositing the same in time in the Government Treasury is an offence punishable under the law. It also affects the interest of the employees from whose salary the tax has been deducted, those unable to claim credits of the tax deducted when he files his own return.
 
 
In last one month, only in 50 big cases prosecution notices have been issued by Mumbai IT TDS office. Out of these, in 80% of the cases the TDS tax default is above Rs. 10 lakh and in 10 % cases, TDS default is between Rs. 5 to Rs.10 lakh. In the remaining 10% cases, TDS default is of more than Rs. 1 crore as detected in the survey.
 
 
Prosecutions have also recently been launched against 4 big business houses where more than Rs 50 Crore of tax was collected by them from the tax payers and yet not deposited with the Government in time.