There are instances when due to bonafide human error either, tax deducted u/s 195 is more than what is deductible or tax remitted is more than what is deducted. In such situations there is presently no option for the deductor to claim refund of tax deducted or remitted more. This is so because circular no: 285 dtd 21/10/80 issued by the CBDT applies to claims of only excess remittances of tds made u/s 192 to 194D. As regards sec 195, there is of course a circular issued by the CBDT(no:790) but that does not cover any of the situations described above. Therefore a deductor who by mistake has remitted excess u/s195 stands to lose whereas the one who faces a similar situation u/s 192 to 194D is benefited. I think the board should be apprised of this matter so that genuine case can be redressed.
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Discussion / Re: sec.40(ia) disallowance for non-payment of TDS
March 15, 2009, 05:21:46 PM
The topic has generated lot of heat everywhere and suddenly disallowances u/s 40(a)(ia) have become a regular feature. Just as disallowance of personal expenses inherent in overall vehicle and telephone expenses apart from low withdrawals were very common in the incometax assessments, in the present scenario sec 40(a) has provided the dept a shot sure weapon to raise demands in the assessments. Moreover, in the reviews and also audit of assessments, this particular area is commented upon. However the recent amendment may provide some relief. The discussion in this forum has been lively and informative.
I would like to ask the forum as to what is the remedy when an assessing officer differs from the assessee with regard to the section applicable when enforcing TDS and accordingly disallows the entire expenditure. This will arise in lot of cases where the assessee hires vehicles and applies 194C, wheras the AO takes the stand that same would fall within the ambit of 194I. There are also various areas and issues where there can be two opinions on the applicability of a particular section. In such situations, there is no room for the AO to make a proportonate disallowance and therefore the assessee suffers.
I would like to ask the forum as to what is the remedy when an assessing officer differs from the assessee with regard to the section applicable when enforcing TDS and accordingly disallows the entire expenditure. This will arise in lot of cases where the assessee hires vehicles and applies 194C, wheras the AO takes the stand that same would fall within the ambit of 194I. There are also various areas and issues where there can be two opinions on the applicability of a particular section. In such situations, there is no room for the AO to make a proportonate disallowance and therefore the assessee suffers.
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Discussion / tds payments
March 13, 2009, 08:29:38 AM
Dear members,
As we all know TDS made in a particular month is to be deposited into the bank a/c on or before the 7th of the following month. Suppose 7th happens to be a bank holiday, doe the payer have an option to pay on the next working day of the bank? In my opinion the payer has no option but to make suitable arrangements for payment of Tds on or before 7th of the following month irrespective of the holidays of the bank. There are arguments in some quarters that under the general clauses act there is a beneficial provision, but i am afraid that provision is meant only for filing papers in the courts but not even for meeting court dues. However as far as payment of advance tax is concerned, there is a beneficial circular issued by the cbdt but for tds there is no such circular. Even one day delay can invite interest u/s 201(1A) for one month!
As we all know TDS made in a particular month is to be deposited into the bank a/c on or before the 7th of the following month. Suppose 7th happens to be a bank holiday, doe the payer have an option to pay on the next working day of the bank? In my opinion the payer has no option but to make suitable arrangements for payment of Tds on or before 7th of the following month irrespective of the holidays of the bank. There are arguments in some quarters that under the general clauses act there is a beneficial provision, but i am afraid that provision is meant only for filing papers in the courts but not even for meeting court dues. However as far as payment of advance tax is concerned, there is a beneficial circular issued by the cbdt but for tds there is no such circular. Even one day delay can invite interest u/s 201(1A) for one month!
#4
Discussion / tds on contracts
March 13, 2009, 07:46:51 AM
Dear friends,
I would like to know whether tds provisions u/s 194C can be applied to a "supply" contract wherein the supplier undertakes to deliver plant and machinery to the purchaser as per the technical requirements and specifications of the purchaser and this process involves discussions,deliberations and confirmations of both the parties. In a nutshell this contract is classified as " Design,engineering,manufacture and supply contract" I am of the view that the "transfer of chattel" theory is favourable to the purchaser.
I would like to know whether tds provisions u/s 194C can be applied to a "supply" contract wherein the supplier undertakes to deliver plant and machinery to the purchaser as per the technical requirements and specifications of the purchaser and this process involves discussions,deliberations and confirmations of both the parties. In a nutshell this contract is classified as " Design,engineering,manufacture and supply contract" I am of the view that the "transfer of chattel" theory is favourable to the purchaser.
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