The Central Board of Direct Taxes (CBDT) has
stated that certain news items that appeared in a section of media regarding
enmasse issue of prosecution notices to small companies for TDS default are
completely misleading and full of factual inaccuracies. CBDT clarified that
Mumbai Income Tax TDS office has issued prosecution Show Cause Notices only
in a limited number of big cases where more than Rs. 5 lakh of tax
was collected as TDS from employees etc and yet the same was not deposited with
the Income Tax Department in time.
CBDT said that some
defaulter companies and vested interests are deliberately misleading the media
to thwart action against themselves. 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 by the unscrupulous
employers who have not deposited the same in time in the Government Treasury.
If the TDS is not deposited in time, the employee would be ineligible for
claiming credit of the tax deducted when he files his own return.
CBDT stated that 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. But such
legal and rightful action is being unfortunately projected in the media by the
vested interests as if the Department is going overboard to harass small
employers.
It would be pertinent
to note that 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. This, by any stretch of imagination, cannot be termed as mass
harassment by the income tax department. Therefore, to say that prosecution
notices enmasse have been sent to taxpayers for minor defaults is completely
incorrect and misleading, the CBDT added.
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