Delayed payment of TDS beyond one year

[Amalraj Michael]

We are private limited company , we paid the TDS amount into Goverment treasury for the fy 09-10 by July 11 .

the IT issued a show cause notice as to why they cannot procecute me for this delay . I believed that TDS should be remited befroe filing of the return and accordingly all the TDS deducted were deposited by July befroe filing of the return with out interest  . The IT issued a notice for the amount relating to first quarter of 9/10 - which goes beyond one year .  I requested the CIT to drop the case as I had paid and I also paid interest later . We also had some financial difficulties - even the creditros were used to be paid after 6 months or so . The CIT says go for compounding - what is meaning of compounding - if we compound , wll they drop the procecuton proceedings ? pl advise   

AI Summary

Failure to remit TDS can trigger penalty or prosecution unless statutory conditions, payment and compounding options are met.
Delayed remittance of TDS can lead to a penalty for failure to deduct tax at source, subject to the assessee's right to a hearing and other procedural conditions. Prosecution for false verification of TDS returns depends on whether a revised return was filed voluntarily and whether taxes plus penal interest have been paid. Prosecution for failure to pay deducted tax is possible but is subject to statutory safeguards and potential compounding where permitted.