Delay in Download of TDS Certificate attracts Penalty

Delay in Download of TDS Certificate attracts Penalty

If as per the records of Centralized Processing Cell (TDS), if the TDS Statements have been filed by you for different quarters and if you have not yet downloaded TDS Certificates (Forms 16/ 16A) from the portal; please refer to the following provisions of the Income Tax Act, 1961 which are related to download of TDS certificate in time and consequence of late download of Certificate from the website http://www.tdscpc.gov.in (hereinafter called TRACES Portal).

 

Downloading of TDS Certificates from TRACES made mandatory: 

 

In this regard, your attention is invited to the CBDT circulars 04/2013 dated 17.04.2013, CBDT Circular No. 03/2011 dated 13-5-2011 and CBDT Circular No. 01/2012 dated 9-4-2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or TRACES Portal.

 

TDS Certificates downloaded only from TRACES hold valid: 

 

In view of above circulars, it may kindly be noted that the TDS Certificates downloaded only from TRACES Portal will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf from time to time.

 

Due Date for downloading and Penalty for non-compliance: 

 

Please be advised that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source. Failure to comply with the provisions of the Act will attract penalty under the provisions of section 272A of the Act, a sum of one hundred rupees for every day during which the failure continues.

 

Assistance for downloading TDS Certificates from TRACES: You can logon to portal http://www.tdscpc.gov.in and refer to our e-Tutorial https://www.tdscpc.gov.in/en/download-form16a-etutorial.html to download TDS Certificates. For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call toll-free number 1800 103 0344.

TDS Credit must be given even if TDS Certificate is not available/ entry is not shown in Form 26AS

Citicorp Finance (India) Ltd vs. ACIT (ITAT Mumbai)

The assessee claimed credit for TDS which was denied by the AO on the ground that the claim did not match the entries shown in Form No. 26AS and that there was a discrepancy. On appeal, the CIT(A) held that the assessee would be entitiled to credit to the extent shown in the computer system of the department. On further appeal by the assessee to the Tribunal HELD:

The AO is not justified in denying credit for TDS on the ground that the TDS is not reflected in the computer generated Form 26AS. In Yashpal Sahwney 293 ITR 539 the Bombay High Court has noted the difficulty faced by taxpayers in the matter of credit of TDS and held that even if the deductor had not issued a TDS certificate, still the claim of the assessee has to be considered on the basis of the evidence produced for deduction of tax at source. The Revenue is empowered to recover tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government. The Delhi High Court has in Court On Its Own Motion Vs. CIT 352 ITR 273 directed the department to ensure that credit is given to the assessee even where the deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by assessee regarding deduction of tax at source and on the basis of indemnity bond.

Note: See also 3i Infotech Limited where it was held “merely because the Department’s system does not indicate the TDS refund, it cannot be held that the assessee should be compelled to deposit the amount once again. It is for the Department to check the error in its system or point out fallacy in the assessee’s claim. There can be no question of penalizing the assessee for no fault committed by it”.