Mr. Srinivas Ayyadevara, Senior Vice President in his welcome address stated that over the years, Tax Deduction at Source (TDS) has emerged as major tool of Revenue collection in India. However, the way the provisions of the Income Tax Act, 1961, deal with the TDS are worded; tax payers have to deal with several interpretational and procedural issues. Adding to the complexity is a plethora of judicial rulings on these issues. This is a cause for concern both for the Tax payers and Revenue. While the tax payers grapple with consequential issues of cash flow, disallowances, interest, penalty and long drawn litigation, revenue, apart from litigation has to deal with administrative issues of refund processing. In addition, the numerous compliance requirements add significantly to the compliance cost to the business.
He also brought few of the problems faced by assessees to the kind notice of department:
* One such is granting of credit in respect of TDS in the return of income has now been linked to the full matching of the same in the NSDL system. This has become an area of unnecessary harassment to all assesses across the country.
* As Processing of income tax returns has been centralized in CPC Bangalore, It has been noticed that very old returns are being processed regularly and fictitious demands raised without checking with the jurisdictional Assessing Officers on the assesses records covering payment of self assessment tax and TDS.
Mr. Abhay Kumar Jain, Chairman, Direct Taxes Committee in his introductory remarks said that it is a transition period, since November 1st on wards the assessees are not able to file the revised returns and TAN login and the Proposed CPC – TDS creates a lot of problem and asked the road map to the commissioner to spell out the future plans of the department. FAPCCI will join hands with department to create awareness about the proposed changes.
Ms. Subashree Anantkrishnan, IRS., Commissioner of Income Tax – TDS while addressing the gathering expressed her happiness that FAPCCI is organizing this meeting, as this will help in resolving some of the issues / problems. These fora are meant to create greater interactions between the department and the tax payers. There are of course several issues which are beyond her capacity which can be posed to the superior authority for redressal.
She informed that State government / Central government - TAN Holders out of 35000 companies, only 6000, Branches of companies – out of 8600, only 4000, for Individuals – Out of 31000 only 400 and firms – out of 2800 only 200 are filed the returns. This shows the compliance level is poor.
The department was lenient and liberal, but now, the department will be aggressive and will take punitive action and also prosecutions when the deductor deducts the amount and not remitting to the government and not filing the returns.
The department’s computerization is so messy, because it will depend on 3rd party compliance, so it is taking more time to settle, there is a need to remain patience during this course of transition.
With regard to CPC Bangalore – earlier the demands were not properly uploaded, they are segregating the refund, we are trying to resolve this issue.
With regard to Cash flow certificates under sec 197, she informant that the department has issued 20000 non deduction certificates to the industries this year. The department can issue lower deduction certificates instead of nil deduction certificates.
She also informed that the suggestion of FAPCCI on to design TDS Challan in such a manner that it should contain PAN numbers of deductees and it must upload at the time of payment of challan and must be credited at the moment is under active consideration of Central Board of Direct Taxes.
Responding to the suggestion of FAPCCI to conduct Lok Adalat for TDS Issues, she informed that the department will conduct the Lok Adalat in association with FAPCCI during January, 2013 to resolve the day – to – day issues.
Mr. C.V.S. Dharaninath, Income Tax Officer gave a detailed power point presentation on Mismatch of TDS and its repurcations.
Sri Ramdev Bhutada, Co- Chairman – Direct Taxes Committee moderated the meeting.
Mr. Ritesh Mittal, Chartered Accountant gave a presentation of Issues under TDS Vis a Vis, CPC- TDS.
Smt. Anjala Sahu, IRS., and Mr. T. Diwakar Prasad, IRS., Addl. Commissioner of Income Tax and other senior officers of the department attended the meeting and clarified many issues along with Commissioner of Income Tax – TDS.
Mr. K. Hanmandloo, Co- Chairman – Direct Taxes Committee proposed vote of thanks.