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Digihunter Update-Gst Registration Cancellation Without A Justification Is Invalid: Allahabad High Court..

The Allahabad High Court ruled that the GST registration cancellation without a justification is incorrect. 

The Petition has been filed challenging the order whereby the registration of the petitioner was cancelled as well as the appellate order whereby the appeal was dismissed as being beyond the prescribed period of limitation. 

The petitioner is a proprietorship concern engaged in civil contractual works and was registered under the GST Act. It appears that as the GST returns was not filed by the counsel, a show-cause notice was served.

Submissions 

 

Counsel for the Petitioner argued that although no fault can be found with the appellate order dismissing the appeal as Appellate Authority does not have the power to condone the delay in terms of the scheme of the Act.

 

He, further argued that the quasi judicial order which has an adverse effect on the right of the petitioner to run business as guaranteed under Article 19 of the Constitution of India, the same has been done without any application of mind which is neither the intent of the Act nor can it be held to be in compliance of the mandate of Article 14 of the Constitution of India. 

Decision 

 

The single judge bench of Justice Pankaj Bhatia observed that there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind, the same does not satisfy the test of Article 14 of the Constitution of India.

 

The bench directed that the petitioner shall file reply to the show-cause notice within a period of three weeks and the Adjudicating Authority i.e. Assistant Commissioner, Lucknow shall proceed to pass fresh order after giving an opportunity of hearing to the petitioner and after considering whatever defence he may take.

 

Case title: M/S Chandra Sain,Sharda Nagar, Lucknow v/s U.O.I.

Citation: Writ Tax No. – 147 Of 2022 

FourV Update-EPFO: New updates! Big relief to pensioners!

15000 limit is going to be removed!

Pension Update: There is great news for pensioners. If you are also a government employee, then a big update regarding pension has come out. According to the new update, the pension of government employees is going to increase soon. The government is now going to increase the limit of pension.

Pension will increase manifold

 

Let us tell you that the matter of abolishing this salary limit of Employees’ Provident Fund Organization is going on in the Supreme Court. Along with this, the calculation of pension in EPFO can also be done on the previous salary i.e. higher salary category. After this decision of EPFO, there will be a bumper increase in the pension received by the employees. With this decision, the employees will get many times more benefits of pension.

 

Hearing was held in August

 

Let us tell you that on August 12 last year, the Supreme Court had adjourned the hearing of a batch of petitions filed by Union of India and EPFO, which said that the pension of the employees cannot be limited. The hearing of these cases is going on in the court.

 

How much is the maximum pension now?

 

Employed people are members of the Employees’ Provident Fund Organisation, who are also considered members of the EPS. All employees contribute 12% of their salary to EPF. Along with this, the employee gets the same amount from the company and 8.33 percent of it also goes to the Employees’ Pension Scheme. Talking about the maximum pensionable salary at this time, it is Rs 15,000.

 

Pension is available after the age of 58 years.

 

Let us tell you that any employee gets the benefit of pension after 58 years. For this, it is mandatory for the employees to work for at least 10 years. Along with this, tell that employees who contribute to EPF are also eligible for EPS.

 

There is also a demand for fixing the date of pension.

 

Along with this, recently many complaints have been received from the pensioners, in which it has been said that people have to wait a long time for their pension. For this, the Employees’ Provident Fund Organization has decided to fix the date of pension.

Income Tax Exemption: Big relief for taxpayers!

New order issued regarding tax exemption, These people will get exemption of Rs 1.5 crore in tax.

Recently, while pointing out the tax exemption given to these people, the government said that they will get a rebate of at least one and a half crore rupees, which will benefit them a lot. Let’s know the whole news in detail.

 

Economic think-tank GTRI said that the GST Council should also think about raising the tax exemption limit to Rs 1.5 crore per annum, as well as doing away with the need for state-wise registration. The Global Trade Research Initiative (GTRI) said in a statement that the GST Council, which is the policy making body for GST, should now focus on the need to maximize benefits by simplifying tax compliance. For this, he has also suggested seven reforms.

GST

 

Among these suggestions, the proposal to give GST exemption to firms with an annual turnover of up to Rs 1.5 crore is the most important. GTRI said that doing this will prove to be a game-changer for the country’s micro, small and medium units and they will be able to give new employment and accelerate growth. At present, only product firms with an annual turnover of less than Rs 40 lakh are exempted from GST registration. On the other hand, in case of service firms, this scope is limited to Rs 20 lakh turnover.

 

GST rate

 

GTRI said, “Of the total registered firms, the number of firms with an annual turnover of less than Rs 1.5 crore is about 84 percent. But their share in the total tax collected is less than seven percent. If the tax exemption limit is increased to Rs 1.5 crore, If it goes, the burden on the GST system will come down and they will have to deal with less than 23 lakh taxpayers.”

 

GST Network

 

There are more than 1.4 crore firms registered on the GST network. Thus it is the largest global forum on indirect taxes. GTRI said that by reducing the burden on the GST network, the concept of matching bills and receipts will be implemented and the problem of fake bills and tax evasion will also go away to a great extent. The gains from this would far outweigh the seven per cent tax loss incurred by excluding firms with a turnover of up to Rs 1.5 crore.

 

GST Number

 

Along with this, the think tank has requested the GST Council to look into eliminating the need for state-wise registration. At present, if a company does business in ten states, then it will have to take GST number everywhere. This makes it difficult for them to take input tax credit.

How to Use Instagram: From DigiHunter Beginner’s Guide.

Over the past few years, Instagram has seen exponential growth — from one million users at its inception to over one billion in 2022.

If you’re interested in getting an Instagram account, or just created one but aren’t sure how to use it, you’re in luck. Here, we’re going to cover all the basics, so you can learn why Instagram is the top social media platform for engagement today.

It’s hard to remember a time before Instagram. At one time, “Do it for the ‘gram” was a common saying, which meant, essentially, “Do something so we can take a picture and post it to Instagram.”

Since then, Instagram has placed a larger and heavier emphasis on video. So you no longer hear the phrase “Do it for the ‘gram.” I bet, though, that a second version of the phrase will soon follow. (Maybe “Do it for reel?”)

“If you’re not part of the one billion users on Instagram, you might want to reconsider. The app is a great chance to engage with top brands and stay a part of friends’ lives. When I want to see how my college friends are doing, I don’t check Facebook, I check Instagram. Plus, you can follow your favorite celebrities or political figures to see candid photos of their everyday lives.”

“Additionally, it’s a phenomenal platform for investigating what other brands are doing — for instance, Nike uses the Instagram Stories’ feature to promote inspirational athlete stories you won’t find anywhere else.”

“If you’re ready to sign up for Instagram, follow these steps below: Go to the Instagram site on your desktop, or download the Instagram app from the App Store (iPhone) or Google Play Store (Android).If you’re on desktop, click “Log in with Facebook”, or fill in the form with your mobile number or email, name, username, and password. Then click “Sign up”. On Android, click “Sign Up With Email or Phone Number”. On iPhone, select “Sign Up”. Enter your email address or phone number, then click “Next”. Alternatively, you can sign up with your Facebook account. Once you’ve filled out your username and password, you will be instructed to fill out your profile info. Then, tap “Done”. If you register with Facebook, you’ll need to log into your Facebook account if you’re currently logged out.”

“How Do Instagram Notifications Work?

 

When your account is created, you’ll want to adjust your notifications so you only receive the information you want. For instance, you can choose to receive notifications when you get likes from everyone — but, alternatively, you might decide to only receive notifications when you get a like from someone you follow. Or, you might turn off notifications for likes altogether. You can adjust notifications to “Off”, “From People I Follow”, or “From Everyone”, for the following categories — Comments, Comment Likes, Likes and Comments on Photos of You, Follower Requests, Accepted Follow Requests, Friends on Instagram, Instagram Direct, Photos of You, Reminders, First Posts and Stories, Product Announcements, View Counts, Support Requests, Live Videos, Mentions in Bio, IGTV Video Updates, and Video Chats. If you’re overwhelmed by that list, I get it — I am, too. If you’re unsure what notifications you want to receive, you might start with your notifications on “From Everyone”, and if certain notifications begin to annoy you, you can turn them off later.”

TDS credit is to be allowed to employee even if Employer not deposited TDS : High Court – FourV Update.

HIGH COURT OF GUJARAT
Milan Arvindbhai Patel
v.
Assistant Commissioner of Income tax
MS. SONIA GOKANI, ACTG., C.J.
AND SANDEEP N. BHATT, J.
R/SPECIAL CIVIL APPLICATION NO. 13863 OF 2022
FEBRUARY  13, 2023
 
Darshan B. Gandhi and S.P. Majmudar for the Petitioner. Nikunt K. Raval for the Respondent.
ORDER
 
MS. Sonia Gokani, Actg., CJ. – The petitioner is an individual, seeking to challenge the action under Article 226 of the Constitution of India of cancelling the outstanding demand as reflected on income tax portal for the Assessment Year 2010-11, 2011-12 and 2012-13 and to quash the recovery notices dated 14-2-2020, dated 15-2-2020 and dated 14-2-2020 for the respectively assessment years, for recovering the unpaid TDS amount of the employer of the petitioner i.e. Kingfisher Airlines as well as seeking the refund of an amount which is adjusted against the outstanding demand.
2. As averred, the petitioner is a pilot working with Indigo Airlines since 2013. During the Assessment Years 2010-11 to 2012-13, he was working with Kingfisher Airlines.
3. The petitioner filed his return of income under Section 139 of the Income-tax Act (‘the Act’ for short) for AY 2010-11, 2011-12 and 2012-13.
4. The notice was received from the office of the Assessing Officers on 19-11-2013 and 21-8-2014 seeking recovery of outstanding demand of Rs. 19,40,707/- for Assessment Year 2011-12 and further notice of 3-3-2015 recovery of 25,12,913/- for Assessment Year 2012-13. In fact, the petitioner, as averred, is eligible for the refund of Rs.45,570/- for the AY 2012-13.
5. The department has issued recovery notices. The petitioner approached his employer – Kingfisher Airlines, requesting to furnish the certificate in relation to the TDS amount deducted. Certificate was given along with the computation of salary on 19-11-2015 stating the Form-16 is under process and filing of annual TDS return will be completed shortly.
6. The summary of income tax return and refund due to the petitioner is given below.
Sl. No.Asst. YearTax Payable’Tax paid by TDSAdvance TaxSelf Assessment TaxRefund as per ITR
12011-1216,04,28615,84,85865,000NA45,750
22012-1316,93,96517,31,599NANA37,630
32013-1417,17,35818,60,410NANA1,43,050
42014-1519,02,07220,07,358NANA1,05,290
52015-1621,55,91722,03,117NANA47,200
62017-1829,86,21027,94,988NA1,91,220NA
72018-1932,60,34427,81,7512,70,0002,08,590NA
82019-2030,09,27330,14,452NANA23,150
92020-2129,22,78730,14,452NANA28,000
102021-2213,42,95114,99,507NANA1,56,560
Total Refund due5,86,630
7. According to the petitioner, the promoter of Kingfisher Airlines – Mr. Vijay Malya got bankrupt, on 11-3-2016, the Government of India – Ministry of Finance circulated office memorandum amongst all the Income-tax Departmental Officers directing them not to raise any demand of taxes on account of mismatch of credit of TDS due to non-payment of TDS by the Kingfisher Airlines. Therefore, the present petition, with the following main prayers.
“10(A) Your Lordships may be pleased to issue a writ of certiorari/mandamus or writ in the nature of certiorari/mandamus quashing the impugned notices of recovery dated 14-2-2020 and 15-2-2020 for the Assessment Year 2010-11, 2011-12 and 2012-13 at Annexure – D (Colly.) and cancel the outstanding demand as reflected on Income-tax Portal for the Assessment Year 2011-12 and 2012-13 at Annexure – F;
(B) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus directing the respondent Assessing Officer to return the amount of Rs. 5,88,820/-, i.e. the amount of refund which is already adjusted against the amount due as per chart mentioned in para 3.4, with interest rate of 9% p.a. within a period of 6 weeks from the date of receipt of the copy of the judgment;
(C) During the pendency and final disposal of the present petition, Your Lordships may be pleased to stay the operation and implementation of the impugned notices of recovery dated 14-2-2020 and 15-2-2020 for the Assessment Year 2010-11, 2011-12 and 2012-13 at Annexure – D (Colly.) as well as direct the respondent not to take corrective action against the outstanding demand as reflected on Income-tax Portal for the Assessment Year 2011-12 and 2012-13 at Annexure – F;”
8. The affidavit-in-reply of the respondent disputes that the demand of refund on the ground that the credit of TDS of an assessee after granting the said TDS amount matched with e-TDS return filed by the tax deductor, would be otherwise automatic. However, in the case of petitioner, the system of Income-tax Department is not allowing any credit of TDS for AY 2010-11, 2011-12 and 2012-13 as per his claim. His return was processed under section 143(1) of the Act without grant of credit of TDS and therefore, the demand has been raised for the respective assessment years, which includes tax and interest.
According to respondent, the online credit of TDS claims for these years is not possible due to the reasons that credit of TDS is not shown by e-TDS data because of the system of the Income-tax Department.
9. On hearing the learned advocate Mr. Darshan Gandhi for the petitioner and learned Senior Standing Counsel Mr. Nikunt Raval for the respondent – Authorities, this Court notices the Office Memorandum dated 11-3-2016 shows the non-deposit of tax deducted at source by the deductor – recovery of demand against the deductee assessee. The Board issued the direction to the Filed Officer that in case an assessee whose tax has been deducted at source but is not deposited to the Government’s account by the deductor, the assessee shall not be called upon to pay the demand to the extent tax has been deducted from his income. It was also specified that section 205 of the I.T. Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch in such situations cannot be enforced effectively.
As some of such directions of the Board were not being strictly followed, the Board had reiterated the instructions contained in its letter dated 1-6-2015, directing the Assessing Officers not to enforce demands created on account of mismatch of credit due to non-payment of TDS amount to the credit of the Government by the deductor.
10. Here is also the case where the petitioner is a pilot by profession and was an employee of Kingfisher Airlines, which has deducted the TDS from his salary for AY 2010-11, 2011-12 and 2012-13. It is not in dispute that such amount had not been deposited by the Airlines to the Central Government’s account and therefore, when the credit was claimed by the petitioner, obviously, the same was not given. Hence, the demand was raised with interest. The petitioner seeks to challenge this, relying on the decision of this Court in case of Kartik Vijaysinh Sonavane v. Dy. CIT [2021] , wherein similarly situated assessee, the Court allowed the petition, directed the department not to deny the benefit of tax deducted at source by the employer during the relevant financial year. Relevant findings and observations of the same are necessary to reproduce here, which are as under :
“7. The factual matrix presented before this Court has not been disputed. It is also not being disputed that the case is no longer res integra and is covered by the decision of this very Court rendered in case of Devarsh Pravinbhai Patel v. Assistant Commissioner of Income-tax Circle 5(1)(1) [SCA No. 12965/2018 with SCA No. 12966/2018, decided on 24-9-2018] where too, the petitioner was an employee of the Kingfisher Airlines and worked as a pilot. In his case also the TDS on the salary made to the petitioner had not been deposited. It is only when the department raised the tax demand with interest and initiated the actions of the recovery that this Court was approached. Relying on the decision of the Bombay High Court rendered in case of Assistant Commissioner of Income-tax and Others v. Om Prakash Gattani [(2000) 242 ITR 638], this Court allowed the same. Vital would be to reproduce the relevant findings and observations.
“4. The issue is no longer res integra. The Division Bench of this Court in case of Sumit Devendra Rajani (supra) examined the statutory provisions and in particular Section 205 of the Income-tax Act, 1961. The Court concurred with the view of the Bombay High Court in case of Asst. CIT v. Om Prakash Gattani, reported in [2000] 242 ITR 638 and observed as under –
10. We are in complete agreement with the view taken by the Bombay High Court and Gauhati High Court. Applying the aforesaid two decisions of the Bombay High Court as well as Gauhati High Court, the facts of the case on hand and even considering section 205 of the Act action of the respondent in not giving the credit of the tax deducted at source for which form no. 16 A have been produced by the assessee – deductee and consequently impugned demand notice issued under section 221(1) of the Act cannot be sustained. Concerned respondent therefore, is required to be directed to give credit of tax deducted at source to the assessee deductee of the amount for which form no. 16 A have been produced.
11. In view of the above and for the reasons stated petition succeeds. It is held that the petitioner assessee deductee is entitled to credit of the tax deducted at source with respect to amount of TDS for which Form No. 16A issued by the employer deductor – M/s. Amar Remedies Limited has been produced and consequently department is directed to give credit of tax deducted at source to the petitioner assessee – deductee to the extent form no. 16 A issued by the deductor have been issued. Consequently, the impugned demand notice dated 6-1-2012 (Annexure D) is quashed and set aside. However, it is clarified and observed that if the department is of the opinion deductor has not deposited the said amount of tax deducted at source, it will always been open for the department to recover the same from the deductor. Rule is made absolutely to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs.”
5. Facts in both case are very similar. Under the circumstances, by allowing these petitions we hold that the Department cannot deny the benefit of tax deducted at source by the employer of the petitioner during the relevant financial years. Credit of such tax would be given to the petitioner for the respective years. If there has been any recovery or adjustment out of the refunds of the later years, the same shall be returned to the petitioner with statutory interest.”
8. In case of Om Prakash Gattani (supra) Gauhati High Court was dealing with the TDS not deposited of prize money payable to the petitioner. It held and observed thus:-
“13. From a perusal of the provisions quoted above relating to the deduction of tax at source in the matters relating to prize money of lotteries, it is evident that the person responsible to make the payment to the assessee is under the statutory obligation to deduct the amount at source. After deduction of the amount he is required to deposit the same to the credit of the Central Government and to issue a certificate of deduction. So far as credit for the amount deducted is concerned, it is to be given on the deposit being made to the credit of the Central Government on production of a certificate furnished under section 203 of the Income-tax Act. On payment of the amount to the credit of the Central Government, it would be treated as payment of tax.
14. So far the assessee is concerned, he is not supposed to do anything in the whole transaction except that he is to accept the payment of the reduced amount from which is deducted income-tax at source. The responsibility to deposit the amount deducted at source as tax is that of the person who is responsible to deduct the tax at source. On the amount being deducted the assessee only gets a certificate to that effect by the person responsible to deduct the tax. In a case where the amount has been deducted by the person responsible to deduct the amount under the statutory provisions, the assessee has no control over the matter. In case of default in making over the amount to the account of the Central Government, it is obviously the person responsible to deduct or the person who has made the deduction who is held responsible for the same. The responsibility of such person is to the extent that he has to be deemed to be an assessee in default in respect of the tax. He may be deemed to be an asses see in default not only in cases where after deduction he does not make over the amount to the Central Government but also in cases where there is failure on his part to deduct the amount at source. This responsibility has been fastened upon him under section 201 of the Income-tax Act. It is, of course, without prejudice to any other consequences which he or it may incur. Presently we are not concerned with the case where the person responsible to make the deductions has not deducted the amount at all. It may or may not fall in a different category from one where the amount has been deducted and not made over to the Central Government. We are concerned with the latter category of cases. As indicated earlier, on the facts it is nobody’s case that the amount was actually not deducted at source by Chandra Agencies. What seems to be in dispute is the deposit of the said amount in the account of the Central Government. The Income-tax Department seems to have made enquiries about the exact date of payment to the Central Government which Chandra Agencies could not furnish on the ground that the papers were forwarded to the chairman of Vaibhavshali Bumper. In such a category of cases we feel that the amount of tax can be recovered by the Income-tax Department treating the person responsible to deduct tax at source as an assessee in default in respect of the tax. It would not be possible to proceed to recover the amount of tax from the assessee. The assessee cannot be doubly saddled with the tax liability. Deduction of tax at source is only one of the modes of recovery of tax. Once this mode is adopted and by virtue of the statutory provisions the person responsible to deduct the tax at source deducts the amount, only that mode should be pursued for the purpose of recovery of tax liability and the assessee should not be subjected to other modes of recovery of tax by recovering the amount once again to satisfy the tax liability. It is, therefore, provided under section 201 of the Income-tax Act that the person responsible to deduct the tax at source would be deemed to be an assessee in default in case he deducts the amount and fails to deposit it in the Government treasury. As observed earlier, the assessee has no control over such person who is responsible to deduct the income-tax at source, but fails to deposit the same in the Government treasury. In this light of the matter, in our view, the notices issued under section 226(3) of the Income-tax Act to the bankers of the petitioner-respondent to satisfy the tax liability from the bank account of the petitioner-respondent are illegal. It is not that the Income-tax Department was helpless in the matter. The person responsible to deduct the tax at source would move into the shoes of the assessee and he would be deemed to be an assessee in default. Whatever process or coercive measures are permissible under the law would only be taken against such person and not the assessee.
15. However, the position as indicated above would not mean that mere deduction of the tax amount at source would amount to total discharge of the tax liability so long as the amount deducted is not deposited in the coffers of the Central Government. It is for this reason Section 199 of the Income-tax Act makes it clear that credit for tax deducted would be given when the amount is deducted and paid to the Central Government and a certificate of deduction is produced as furnished under section 203 of the Income-tax Act. It is obvious that unless the amount is paid to the Central Government, the tax liability is not discharged, nor can it be said that the assessee has made the payment of the tax amount payable to the Government. We find no force in the submission made on behalf of the petitioner-respondent that on mere deduction of the amount at source, credit for tax deducted must be given and it cannot be withheld even though the person responsible to deduct the tax at source has not made it over to the Central Government. In our view, if that contention is accepted that credit for tax deducted has to be given on mere deduction of the amount at source, in that event, perhaps, there would be no legal justification to treat the person responsible to deduct the amount at source as an assessee in default in respect of the tax. Once credit on account of payment of tax is given, the tax liability will stand discharged. Any step to recover the amount of tax can be taken only in case the tax liability is not discharged and it still subsists. In this view of the matter, Shri K. P. Sarma, learned counsel appearing for the Revenue, has rightly defended the note appended by the Assessing Officer in the order of assessment making it clear that credit for the amount deducted was not being given and that will be given only when evidence as to actual payment of the amount to the Central Government is furnished. But this position would not legally justify initiation of recovery proceedings against the assessee from whose income tax has been deducted at source, but the person responsible to deduct the tax fails to deposit the same in the Government treasury. The statutory scheme evolved to employ this mode of recovery of tax at source also points to the same position and in our view rightly. Otherwise a taxpayer from whose income tax is liable to be deducted at source would be exposed to a great vulnerable position. If some unscrupulous persons responsible to deduct the tax at source, after deducting the amount do not deposit the amount in the Government treasury, such persons should be saddled with the tax liability. Therefore, under section 201 of the Income-tax Act it has been aptly provided that the person responsible to deduct the tax would be deemed to be an assessee in default so that he can be proceeded against for recovery of the amount instead of the assessee who has already parted with the amount, but due to some commission or omission on the part of the person responsible to deduct the amount at source over whose activity he has no control, he may not be subjected to double payment of tax and brunt of arduous recovery proceeding. The provisions as contained in section 201 of the Act provide a kind of protection to the assessee where tax liability as standing against him is not yet discharged and credit for the amount deducted cannot be given in terms of section 199 of the Income-tax Act.
16. A perusal of section 205 of the Income-tax Act clarifies the position where it provides that where tax is deductible at source, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income. What is noticeable in this provision is that its applicability is not dependent upon the credit for tax deducted being given under section 199 of the Income-tax Act. What is necessary for applicability of this provision is that the amount has been deducted from the income. In case where the amount has been deducted but not paid to the Central Government that eventuality is taken care of by Section 201 of the Income-tax Act. Learned counsel for the appellant could not show that under the law it may be permissible to proceed against the assessee even after deduction of the tax at source, nor learned counsel for the petitioner-respondent could persuade us to hold that merely by deduction of tax at source, credit for deduction of tax at source has to be given even though the amount may not have been made over to the Government treasury. The reason for this has already been explained by us in the discussion held in the earlier part of this judgment as the mere deduction of tax at source would not close the chapter of tax liability unless it is deposited in the Government treasury.”
9. The facts being almost identical, no separate reasoning are desirable and the petition is being ALLOWED. The department is precluded from denying the benefit of the tax deducted at source by the employer during the relevant financial years to the petitioner.
10. It is given to understand by learned Senior Standing Counsel Mr. Varun Patel that the proceedings have been initiated against the employer.
11. The credit of the tax shall be given to the petitioner and if in the interregnum any recovery or adjustment is made by the respondent, the petitioner shall be entitled to the refund of the same, with the statutory interest, within eight (8) weeks from the date of receipt of copy of this order.
12. Petition is accordingly disposed of.”
11. The above ratio would have direct applicability in the instant case. Reference of section 205 of the I.T. Act is to the effect where it provides that the tax when is deductible at source, assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted form that income. Its applicability is not dependent upon the credit for tax deducted being given under section 199 of the I.T. Act.
12. Facts being identical, petition is allowed. The department shall not be denying the benefit of tax deducted at source by the employer during the relevant financial years to the petitioner. The credit of the tax shall be given to the petitioner and if in the interregnum, any recovery or adjustment is made by the department, the petitioner shall be entitled to the refund, with the statutory interest, within eight (08) weeks from the date of receipt of copy of this order.
13. Petition is accordingly disposed off.
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MCA issues new rules on voluntary exit of companies-FourV Update

New Delhi: Companies keen to exit their business for various economic reasons can now hope for quick regulatory clearance with the government operationalising the newly set up Centre for Processing Accelerated Corporate Exit (CPACE).

 

The Ministry of Corporate Affairs on Monday notified the rules authorising CPACE to handle this work, taking over the task from RoCs across the country. CPACE is set up at the Indian Institute of Corporate Affairs, an institution attached to the ministry.

 

The amended rules for removal of companies from the official register will be effective 1 May, the ministry said while also bringing out the forms for voluntary closure.

The move of shifting voluntary closure of companies to a centralised agency is part of a revamp of the approval process for various corporate filings aimed at uniform and quick decision-making process.

 

The ministry also replaced three forms that are related to the process of striking off the names of companies while giving the all-India jurisdiction to CPACE for voluntary closure of companies.

The forms entail some changes, including provision for disclosing pending litigation, explained Virender Bhasin, Executive Director, Entity Setup and Management at Nexdigm, a consultancy.

 

“The changes are welcome and it will accelerate the pace of strike applications pending with respective ROCs at a faster pace after introduction of centralized processing centre for exit. Also, some modifications in the form will provide better transparency resulting in good governance,” said Bhasin.

 

Companies chose to go for voluntary closure for various economic reasons including unviability of the business or changed circumstances. For closure, the companies should not have any unmet liability. Voluntary closure is different from government’s action of removing a company from the register for defaulting on filing statutory documents for two consecutive years, although most such defaulting companies may also be defunct. 

 

Income tax department has sent notices to about 8,000 taxpayers-FourV Technologies Pvt Ltd

India’s income tax department has sent notices to about 8,000 taxpayers who have made large donations to charitable trusts, suspecting them to be attempts at tax evasion. Data analytics suggested these taxpayers were making donations disproportionate to their income and expenditure, officials told ET.

 

Those served notices include salaried and self-employed individuals, apart from companies.

 

The IT department is also looking into independent tax professionals who facilitated these transactions.

 

“In all 8,000 odd cases, the donation was exactly the amount required to lower the tax slab or get a full exemption and was paid by cash,” a tax official said. “Also, an exceptionally high amount was paid to tax professionals, even by a straight salaried person.”

 

The notices were sent over three weeks from mid-March to early April and were for the assessment years 2017-18 to 2020-21. More notices are likely in the coming weeks.

 

In the case of businesses, mostly small ones, the amount paid to charitable trusts was out of sync with income, the officials said.

 

In these transactions, cash contributions are returned to the taxpayer along with a donation receipt after deducting a commission, helping the assessee evade tax, they said.

 

The department is also tracking charitable trusts that are offering fake bills to taxpayers. While no action has been initiated against them so far, they may lose their tax exemption status if there is wrongdoing.

 

Data analytics being used

 

Contributions to certain funds and charitable institutions are allowed as deductions from income under Section 80G of the Income Tax Act. Depending on the nature of the institution, 50-100% of the contribution may be allowed as deduction. Such donations are also subject to limits linked to income.

 

Data analytics is being used to track misuse of some deductions under the old income tax regime, especially Section 80G, along with 80 GGC and 80GGB, which entitle taxpayers to deductions in income tax for donations to charitable trusts and political parties, said the official cited above.

 

The income tax department is separately investigating donations to dormant political parties and has already sent several notices.

 

Budget data shows ₹1,430 crore tax foregone in FY22 on Section 80G contributions by companies.

 

In the case of individuals and Hindu Undivided Families (HUFs), the revenue foregone on Section 80G donations was 1,729 in FY22, up from 1,541 in the preceding year.

 

Tax experts said that while such evasion was possible in the past, strict compliance and synchronised data collection by the tax department will make it difficult with measures such as disallowing donations above 2,000 in cash.

Updated Advisory: Time limit for Reporting Invoices on the IRP Portal | DigiHunter |

Dear Taxpayers,

 

1. It is to inform you that it has been decided by the Government to impose a time limit on reporting old invoices on the e-invoice IRP portals for taxpayers with AATO greater than or equal to 100 crores.

 

2. To ensure timely compliance, taxpayers in this category will not be allowed to report invoices older than 7 days on the date of reporting.

 

3. Please note that this restriction will apply to the all document types for which IRN is to be generated. Thus, once issued, the credit / Debit note will also have to be reported within 7 days of issue.

 

4. For example, if an invoice has a date of April 1, 2023, it cannot be reported after April 8, 2023. The validation system built into the invoice registration portal will disallow the user from reporting the invoice after the 7-day window. Hence, it is essential for taxpayers to ensure that they report the invoice within the 7-day window provided by the new time limit.

 

5. It is further to clarify that there will be no such reporting restriction on taxpayers with AATO less than 100 crores, as of now.

 

6. In order to provide sufficient time for taxpayers to comply with this requirement, which may require changes to your systems, we propose to implement it from 01.05.2023 onwards.

No Penalty under 271C of Income Tax for delayed payment of TDS or non-payment of deducted TDS : Supreme Court

SUPREME COURT OF INDIA
US Technologies International (P.) Ltd.
v.
Commissioner of Income-tax
M.R. SHAH AND C.T. RAVIKUMAR, JJ.
CIVIL APPEAL NO. 7934 OF 2011 AND 1258-1260 OF 2019
APRIL  10, 2023
 
M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment(s) and order(s) passed by the High Court of Kerala at Ernakulam in confirming the levy of interest/penalty under  Section 271C of the Income Tax Act, 1961 (hereinafter referred to as the Act) on failure of the respective assessees to deposit the tax deducted at source (TDS) (or belated remittance of the TDS), the respective assessees have preferred the present appeals.
CIVIL APPEAL NO.
7934/2011
2. The facts leading the present appeal in a nutshell are as under: ­

2.1 From 01.04.2002 to February, 2003, the appellant – assessee, engaged in a software development business at Techno Park, Trivandrum which employed about 700 employees, deducted tax at source (TDS) in respect of salaries, contract payments, etc., totalling Rs. 1,10,41,898/­ for the  assessment year (AY) 2003­04. In March, the assessee remitted part of the TDS being Rs. 38,94,687/­ and balance of Rs. 71,47,211/­ was remitted later. Thus, the period of delay ranged from 05 days to 10 months. On 10.03.2003, a survey was conducted by the Revenue at assessee’s premises and it was noted that TDS was not deposited within the prescribed dates under Income Tax Rules (IT Rules). On 02.06.2003, Income Tax Officer (ITO) vide order under Section 201(1A) of the Act, 1961 levied penal interest of Rs. 4,97,920/­ for the period of delay in remittance of TDS. On 09.10.2003, the Additional Commissioner of Income Tax issued a show cause notice proposing to levy penalty under Section 271C of the amount equal to TDS. That the assessee replied to the
said show cause notice vide reply dated 28.10.2003. That on 06.11.2003, another order under Section 201(1A) was passed
levying the penal interest of Rs. 22,015/­. On 10.11.2003, the Additional Commissioner of Income Tax (ACIT) vide order under Section 271C levied a penalty of Rs. 1,10,41,898/­ equivalent to the amount of TDS deducted for AY 2003­-04. That order of Additional CIT levying the penalty under Section 271C came to be confirmed by the High Court by the
impugned judgment and order. The High Court vide impugned judgment and order has dismissed the appeal preferred by the assessee by holding that failure to deduct/remit the TDS would attract penalty under Section 271C of the Act, 1961.
2.2 Feeling aggrieved and dissatisfied with the levy of interest/penalty under Section 271C of the Income Tax Act, 1961 on late remittance of TDS is the subject matter of preferred appeal(s).
CIVIL APPEAL NOS. 1258­1260/2019
 
3. The facts leading to the present appeals in a nutshell are under: ­
3.1 By order(s) dated 26.09.2013, the ACIT by way of orders under Section 271C levied penalty equivalent to the amount of TDS deducted for AYs 2010-­11, 2011­-12 and 2012­-13 on the ground that there was no good and sufficient reason for not levying penalty
3.2 The CIT (Appeals) dismissed the assessees’ appeals. By common order dated 01.06.2016 the Income Tax Appellate Tribunal (ITAT) allowed the assessees’ appeals by holding that imposition of penalty under Section 271C was unjustified and reasonable causes were established by the assessee for remitting the TDS belatedly. By the impugned common
judgment and order the High Court has allowed the Revenue’s appeals relying upon its earlier judgment (which is the subject matter of Civil Appeal No. 7934/2011 as above). The impugned judgment and order passed by the High Court is the subject matter of present appeals being Civil Appeals Nos. 1258­1260/2019.
4. Shri Arijit Prasad and Shri C.N. Sreekumar, learned Senior Advocates have appeared on behalf of the respective assessees and Shri Balbir Singh, learned ASG assisted by Ms. Monica Benjamin, learned counsel has appeared on behalf of the Revenue.

5. Shri Arijit Prasad, learned Senior Advocate appearing on behalf of the assessee in Civil Appeal No. 7934/2011 has vehemently submitted that in the facts and circumstances of the case, the levy of penalty under Section 271C of the Act, 1961 is not justifiable at all. It is submitted that in the facts and circumstances of the case there shall not be any penalty leviable under Section 271C of the Act, 1961.
5.1 It is further submitted by Shri Arijit Prasad, learned Senior Advocate appearing on behalf of the assessee that here is the case of lateremittance of the TDS and not a case of nondeduction of TDS at all. It is submitted that therefore, at the most, the assessee shall be liable to pay the penal interest leviable under Section 201(1A) of the Act, 1961. It is submitted that however, there shall not be any levy of penalty under Section 271C of the Act, 1961 on mere late remittance of the TDS though deducted.
5.2 It is further submitted by Shri Arijit Prasad, learned Senior Advocate appearing on behalf of the assessee that Section 271C would be applicable only in case of non­deduction of whole or any part of the tax [Section 271C(1) (a)]. It is submitted that Section 271C(1)(a) shall be applicable in case of non­deduction of whole or any part of the tax as required by or under the provisions of Chapter XVIIB. It is submitted that in the present case Section 271C(1)(b) shall not be applicable. It is submitted that therefore taking into consideration the words employed in Section 271C(1)(a), there shall be levy of penalty of a sum equal to the amount of tax in case of failure on the part of the concerned person who fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB. It is submitted that in case of belated remittance of the TDS, there shall not be any levy of interest under Section271C of the Act, 1961.
5.3 It is submitted that as per the cardinal principle of law, a penal provision is required to be construed strictly and literally and nothing is to be added in the Section and the penalty provisions are required to be read as they are.
5.4 It is submitted that so far as the belated remittance of the TDS is concerned, the Statute provides for penal interest under Section 201(1A) of the Act, 1961. It is submitted that the penal interest levied under Section 201(1A) is compensatory in nature. It is submitted that therefore, when the Parliament thought it fit to levy the penal
interest on late remittance of the TDS for the belated period, there shall not be any levy of the penalty under Section 271C for belatedremittance of the TDS.
5.5 It is submitted that if the stand taken by the Revenue and the views taken by the High Court that even on belated remittance of the TDS there shall be penalty levied under Section 271C of the Act, is accepted, in that case it would tantamount to adding something more than which is not provided in the Section. It is submitted that words used in Section 271C are “fails to deduct the whole or any part of the tax.” It is submitted that it does not speak “fails to deduct and remitted belatedly.” 
5.6 Shri Arijit Prasad, learned Senior Advocate appearing on behalf of the assessee has drawn our attention to Section 276B of the Act, 1961. It is submitted that as per Section 276B of the Act “if a person fails to pay to the credit of the Central Government the tax deducted at source by him as required by or under the provisions of Chapter XVIIB, he shall be liable to be prosecuted and shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.” It is submitted that therefore, Section 276B talks about “fails to pay,” the words which are missing in Section 271C of the Act. It is submitted that therefore, wherever, the Parliament wanted to provide for the consequences on non­payment of the TDS, the same is provided like Section 276B of the Act. It is submitted that therefore, thus the
words in Section 271C and Section 276B are different and distinct.
5.7 It is further submitted by Shri Arijit Prasad, learned Senior Advocate appearing on behalf of the assessee that even otherwise, the impugned judgment and order passed by the High Court has been subsequently overruled by the Full Bench of the Kerala High Court in the case of Lakshadweep Development Corporation Ltd. Vs. Additional Commissioner of Income Tax (TDS) and Anr. (2019) 411 ITR 213 (FB).
5.8 It is further submitted by learned counsel appearing on behalf of the respective assessees in respective appeals that even otherwise in exercise of powers under Section 273B, no penalty shall be imposed on the person or the assessee, for any failure, if he proves that there was a reasonable cause for the said failure. Reliance is placed on the decision of this Court in the case of CIT Vs. Bank of Nova Scotia (2016) 15 SCC 81.
5.9 It is submitted that in the case of Civil Appeals Nos. 1258­60/2019, the ITAT found in favour of the assessee that there was a reasonable cause for the assessee for the failure to remit the TDS belatedly. It is submitted that once the ITAT found the case falling under Section 273B, the same was not required to be interfered with by the High Court as the same cannot be said to a substantial question of law.
5.10 Making the above submissions, it is prayed to allow the present appeals and to hold that for late remittance of the TDS, there shall not be any penalty leviable under Section 271C of the Act, 1961.
6. All these appeals are vehemently opposed by Shri Balbir Singh, learned ASG assisted by Ms. Monica Benjamin, learned counsel,appearing on behalf of the Revenue.
6.1 Shri Balbir Singh, learned ASG appearing on behalf of the Revenue has vehemently submitted that Section 271C of the Act has been inserted in the year 1987. It is submitted that the object and purpose of inserting Section 271C is to levy the penalty for failure to deduct tax at source. It is submitted that under the old provision of Chapter XXI of the Income Tax Act, no penalty was provided for failure to deduct tax at source though, this default, however, attracted prosecution under the provisions of Section 276B, which prescribed punishment for failure to deduct tax at source or after deducting failure to remit the same to the Government and therefore, Section 271C came to be inserted to provide for levy of penalty for failure to deduct tax at source. It is submitted that therefore, in a case where though the assessee has deducted the tax
(TDS), but does not remit the same to the Government and/or belatedly remits the TDS after deducting, such an assessee is liable to pay the penalty under Section 271C of the Act.
6.2 It is submitted that any other view will frustrate the object and purpose of insertion of Section 271C of the Act. Then, Shri Balbir Singh, learned ASG has taken us to the CBDT Circular No. 551 dated 23.01.1998, explaining the amendment and insertion of Section 271C. It is submitted that the object and purpose of insertion of Section 271C seems to be that over and above the prosecution, the person who has deducted tax at source but not remitted the same to the Government shall also be liable to pay penalty and that is why Section 271C has been inserted.
6.3 Making the above submissions, it is prayed to dismiss the present appeals.
7. Heard learned counsel appearing on behalf of the respective parties at length.
7.1 The short question which is posed for the consideration of this Court is in case of belated remittance of the TDS after deducting the TDS whether such an assessee is liable to pay penalty under Section 271C of the Act, 1961?
7.2 The question which is also posed for the consideration of this Court is what is the meaning and scope of the words “fails to deduct” occurring in Section 271C(1)(a) and whether an assessee who caused delay in remittance of TDS deducted by him, can be said a person who “fails to deduct TDS”?
7.3 In order to appreciate the rival contentions and to answer the aforesaid questions, it is necessary to have analysis of Statutory provisions.
7.4 The relevant provisions are as under: ­
“Section 201(1A) of the Act Without prejudice to the provisions of sub­section (1), if any such person, principal officer or company as is referred to in that sub­section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,
—
(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and
(ii) at one and one­half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of subsection (3) of Section 200:]
 
Section 271C of the Act
 
271­C. Penalty for failure to deduct tax at source. (1) If any person fails to—
(a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII­B; or
(b) pay the whole or any part of the tax as required by or under,—
(i) sub­section (2) of Section 115­O; or
(ii) the second proviso to Section 194­B;
then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.]
(2) Any penalty imposable under subsection (1) shall be imposed by the Joint Commissioner.
 
Section 273B of the Act
273­B. Penalty not to be imposed in certain cases.—Notwithstanding anything contained in the provisions of clause (b) of sub­section (1) of Section 271, Section 271­A 4203[Section 271­ AA], Section 271­B 4204[Section 271­ BA], 4205[Section 271­
BB, 4206[Section 271­C, Section 271­ CA], Section 271­D, Section 271­E, 4207[Section 271­F,] 4208[Section 271­FA 4209[, 4210[Section 271­FAB, Section 271­FB, Section 271­G, Section 271­GA, 4211[Section 271­ GB,]]] 4212[Section 271­ H,] 4213[Section 271­I,] 4214[Section 271­J,] clause (c) or clause (d) of subsection (1) or sub­section (2) of Section 272­A, sub­section (1) of Section 272­ AA] or 4215[Section 272­B or] 4216[sub­section (1) or sub­section (1­A) of Section 272­BB] or sub­section (1) of Section 272­BBB or] clause (b) of sub­section (1) or clause (b) or clause (c) of sub­section (2) of Section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.
 
Section 276B of the Act
276­B. Failure to pay tax to the credit of Central Government under Chapter XII­D or XVII­B.—If a person fails to
pay to the credit of the Central Government,—
(a) the tax deducted at source by him as required by or under the provisions of Chapter XVII­B; or
(b) the tax payable by him, as required by or under,—
(i) sub­section (2) of Section 115­O; or
(ii) the second proviso to Section 194­B, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.”
7.5 At the outset, it is required to be noted that all these cases are with respect to the belated remittance of the TDS though deducted by the assessee and therefore, Section 271C(1)(a) shall be applicable. At the cost of repetition, it
is observed that it is a case of belated remittance of the TDS though deducted by the assessee and not a case of non­deduction of TDS at all.
7.6 As per Section 271C(1)(a), if any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB then such a person shall be liable to pay by way of penalty a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid. So far as failure to pay the whole or any part of the tax is concerned, the same would be with respect to Section 271C(1)(b) which is not the case here. Therefore, Section 271C(1)(a) shall be applicable in case of a failure on the part of the concerned person/assessee to “deduct” the whole of any part of the tax as required by or under the provisions of Chapter XVIIB. The words used in Section 271C(1)(a) are very clear and the relevant words used are “fails to deduct.” It does not speak about belated remittance of the TDS. As per settled position of law, the penal provisions are required to be construed strictly and literally. As per the
cardinal principle of interpretation of statute and more particularly, the penal provision, the penal provisions are required to be read as they are. Nothing is to be added or nothing is to be taken out of the penal provision.
Therefore, on plain reading of Section 271C of the Act, 1961, there shall not be penalty leviable on belated remittance of the TDS after the same is deducted by the assessee. Section 271C of the Income Tax Act is quite categoric. Its scope and extent of application is discernible from the provision itself, in unambiguous terms. When the nondeduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVIIB would invite penalty under Clause 271C(1)(a); only a limited text, involving sub­section (2) of Section 115O or covered by the second proviso to Section 194B alone would constitute an instance where penalty can be imposed in terms of Section 271C(1)(b) of the Act, namely, on non­payment. It is not for the Court to read something more into it,
contrary to the intent and legislative wisdom.
7.7 At this stage, it is required to be noted that wherever the Parliament wanted to have the consequences of non­payment and/or belated remittance/payment of the TDS, the Parliament/Legislature has provided the same like in Section 201(1A) and Section 276B of the Act.
7.8 Section 201(1A) provides that in case a tax has been deducted at source but the same is subsequently remitted may be belatedly or after some days, such a person is liable to pay the interest as provided under Section 201(1A) of the Act. The levy of interest under Section 201(1A) thus can be said to be compensatory in nature on belated remittance of the TDS after deducting the same. Therefore, consequences of nonpayment/belated remittance/payment of the TDS are specifically provided under Section 201(1A).
7.9 Similarly, Section 276B talks about the prosecution on failure to pay the TDS after deducting the same. At this stage, it is required to be noted that Section 271C has been amended subsequently in the year 1997 providing Sections 271C(1)(a) and 271C(1)(b). As observed hereinabove, fails to pay the whole or any part of the tax would be falling under Section 271C(1)(b) and the word used between 271C(1)(a) and 271C(1)(b) is “or”. At this stage, it is required to be noted that Section 276B provides for prosecution in case  of failure to “pay” tax to the credit of Central Government. The word “pay” is missing in Section 271C(1)(a).
8. Now so far as the reliance placed upon the CBDT’s Circular No. 551 dated 23.01.1998 by learned ASG is concerned, at the outset, it is required to be noted that the said circular as such favours the assessee. Circular No. 551 deals with the circumstances under which Section 271C was introduced in the Statute, for levy of penalty. Paragraph 16.5 of the above Circular reads as follows:
“16.5″: Insertion of a new section 271C to provide for levy of penalty  for failure to deduct tax at sourceunder the old provisions of Chapter XXI of the Income Tax Act no penalty was provided for failure to deduct tax at source. This default,
however, attracted prosecution under the provisions of Section 276B, which prescribed punishment for failure to deduct tax at source or after deducting failure to pay the same to the Government. It was decided that the first part of the default, i.e., failure to deduct tax at source should be made liable to levy of penalty, while the second part of the default, i.e., failure to pay the tax deducted at source to the Government which is a more serious offence, should continue to attract
prosecution. The Amending Act, 1987 has accordingly inserted a new Section 271C to provide for imposition of penalty on any person who fails to deduct tax at source as required under the provisions of Chapter XVIIB of the Act. The penalty is of a sum equal to the amount of tax which should have been deducted at source.
 
On fair reading of said CBDT’s circular, it talks about the levy of penalty on failure to deduct tax at source. It also takes note of the fact that if there is any delay in remitting the tax, it will attract payment of interest under Section 201(1A) of the Act and because of the gravity of the mischief involved, it may involve prosecution proceedings as well, under  Section 276B of the Act. If there is any omission to deduct the tax at source, it may lead to loss of Revenue and hence remedial measures have been provided by incorporating the provision to ensure that tax liability to the said extent would stand shifted to the shoulders of the party who failed to effect deduction, in the form of penalty. On deduction of tax, if there is delay in remitting the amount to Revenue, it has to be satisfied with interest as payable under Section 201(1A) of the Act, besides the liability to face the prosecution proceedings, if launched in appropriate cases, in terms of Section 276B of the Act.
Even the CBDT has taken note of the fact that no penalty is envisaged under Section 271C of the Income Tax Act for non deduction TDS and no penalty is envisaged under Section 271C for belated remittance/payment/deposit of the TDS.
8.1 Even otherwise, the words “fails to deduct” occurring in Section 271C(1)(a) cannot be read into “failure to deposit/pay the tax deducted.”
8.2 Therefore, on true interpretation of Section 271C, there shall not be any penalty leviable under Section 271C on mere delay in remittance of the TDS after deducting the same by the concerned assessee. As observed hereinabove, the consequences on nonpayment/belated remittance of the TDS would be under Section 201(1A) and Section 276B of the Act, 1961.
9. In view of the above in all these cases as the respective assessees remitted the TDS though belatedly and it is not case of non­deduction of the TDS at all they are no liable to pay the penalty under Section 271C of the Income Tax Act. Therefore, any question on applicability of Section 273B of the Act is not required to be considered any further.
10. In view of the above and for the reasons stated above, all these appeals succeed.
Impugned judgment(s) and order(s) passed by the High Court are hereby quashed and set aside and the question of law on interpretation of Section 271C of the Income Tax Act is answered in favour of the assessee(s) and against the Revenue and it is specifically observed and held that on mere belated remitting the TDS after deducting the same by the concerned person/assessee, no penalty shall be leviable under Section 271C of the Income Tax Act. Present appeals are accordingly allowed. No costs.
…………………………………..
[M.R. SHAH]
…………………………………..
[C.T. RAVIKUMAR]
NEW DELHI;
APRIL 10, 2023

CRN full form in Income Tax

The CRN full form is  Challan Reference Number.

 

Why does taxpayer need to create a Challan (CRN)?

 

Resolution:

In e-Pay Tax service at e-Filing portal, it is mandatory to generate the Challan for the payment of direct taxes. Every such generated Challan will have a unique Challan Reference Number (CRN) associated with it.

 

Who can generate a Challan (CRN)?

 

Resolution:

Any taxpayer (including tax deductors & collectors) required to make direct tax payment and willing to use e-Pay Tax service at the e-Filing Portal can generate Challan (CRN). Challan (CRN) can also be generated via Post-Login/PreLogin option available in the service.

What are the various modes available for making payment after generation of Challan (CRN)?

 

Resolution:

After generation of Challan (CRN), following modes are available for making tax payment:

  • Net Banking (of selected Authorised Banks)
  • Debit Card (of selected Authorised Banks)
  • Pay at Bank Counter (Over the Counter Payment at the Branches of selected Authorised Banks)
  • RTGS / NEFT (through any bank having such facility)
  • Payment Gateway (using sub-payment modes as Net Banking, Debit Card, Credit Card, and UPI)

* RTGS/NEFT and Payment Gateway are newly added payment methods as an upgradation in the e-Pay Tax service on the e-Filing portal.

 

What will happen if no payment is initiated after creation of Challan (CRN)?

 

Resolution:

A partially created Challan remains in the “Saved Drafts” tab unless it is finally generated along with the Challan Reference Number (CRN). After generation of CRN, it moves to “Generated Challan” tab and is valid for 15 days after the date of generation of CRN. Taxpayer may initiate payment against the CRN within this validity period.  If no payment is initiated in the said period, CRN will expire, and taxpayer will have to generate a fresh CRN for making the payment.   

In case, Challan (CRN) is generated on or after 16th March for the payment of ‘Advance Tax’, then the valid till date is by default set as 31st March of that Financial Year.

What is meant by “Valid Till” date printed on the Challan Form (CRN)? 

 

Resolution:

The “Valid Till” date is the date till which Challan Form (CRN) remains valid for making payment.  After the expiry of “Valid Till” date, the status of an unused Challan Form (CRN) is changed to  Expired. Example, if a CRN is generated on 1st April, then it will remain valid till 16th April and on  17th April the status of CRN will be changed to Expired, if payment is not initiated against that  CRN.

 

If a taxpayer presents the Payment Instrument to the Authorised Bank on or before the “Valid Till”  date while using the ‘Cheque’ as the Pay at Bank mode, the Challan “Valid Till” date will be  extended by an additional 90 days.

 

In case, Challan form (CRN) is generated on or after 16th March for the payment of ‘Advance Tax’,  then the valid till date is by default set as 31st March of that Financial Year.

Where can taxpayer view generated Challan (CRN)? Will taxpayer be able to view expired  Challans (CRN)?

 

Resolution:

Taxpayer can view generated Challans (CRN) on the e-Pay Tax page under the “Generated Challans” tab on e-Filing portal post-login. Expired Challan (CRN) will also be available on the e-Pay Tax page under the Generated Challans tab for 30 days from the “Valid Till” date.

 

Can taxpayer make modifications in the already generated Challan (CRN)?

 

Resolution:

No. Once a Challan (CRN) is generated, it cannot be modified. However, it can be used to  generate a new Challan  (CRN) by copying the information from an earlier Challan (CRN).

 

Does a taxpayer need to select the mode of payment during generation of challan (CRN)?

 

Resolution:

Yes, the taxpayer has to mandatorily select mode of payment at the generation of challan (CRN).

Can a taxpayer change the mode of tax payment after generating Challan (CRN)?

 

Resolution:

Once a Challan (CRN) is generated, the taxpayer cannot change the Mode of Payment.

If the taxpayer wants to make tax payment through some other mode, a new Challan (CRN) needs  to be generated and the old challan will expire after 15 days.

Create Challan FAQ

In order to make any Income Tax payment for an assessment year through the e-Filing portal, you will have to create a challan for the same.

Registered or unregistered users (Corporate / Non-Corporate users, ERIs and Representative Assessee) on the e-Filing portal can create a challan.

You can pay the following under Corporate tax options:

  • Advance Tax
  • Self-Assessment Tax
  • Tax on Regular Assessment
  • Tax on Distributed Profit of Companies
  • Tax on Distributed Income to Unit Holders
  • Surtax
  • Secondary Adjustment Tax under Section 92CE of Income Tax Act, 1961
  • Accretion Tax under Section 115TD of Income Tax Act, 1961

You can pay the following under Corporate tax options:

  • Advance Tax
  • Self-Assessment Tax
  • Tax on Regular Assessment
  • Secondary Adjustment Tax under Section 92CE of Income Tax Act, 1961
  • Accretion Tax under Section 115TD of Income Tax Act, 1961.

You can pay the following under Fee / Other Payments:

  • Wealth Tax
  • Fringe Benefit Tax
  • Banking Cash Transaction Tax
  • Interest Tax
  • Hotel Receipts Tax
  • Gift Tax
  • Estate Duty
  • Expenditure / Other Tax
  • Appeal Fee
  • Any Other Fee