TaxTMI 
TaxTMI 
Standard Operating Procedure For Prosecution in Cases Of TDS/TCS Default
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....umstances of the case, like where there are instances of repeated defaults and/or tax has not been deposited till detection. 1.2 Thus, the present Instructions envisage two categories of cases for prosecution in TDS related offences; the first category is cases which are mandatorily to be processed (TDS of more than Rs. 1,00,000 deducted but not deposited before due date) and the second category is defaults between Rs. 25,000/- to 1,00,000/- which may be processed depending upon facts and circumstances of the cases. Identification of cases: 2.1. CPC-TDS/TRACES will generate a list of prosecutable cases for mandatory processing for prosecution (List-A) in accordance with the criteria laid down by the CBDT vide it's instruction dated 07.02.2013 or any other modified criteria, if the same is done in view of suggestions made in this regard. Such identification shall be done within one month of the filing of the quarterly TDS statement. CPC - TDS following the Instruction dated 07.02.2013, adopted following two parameters for identifying prosecutable case for mandatory processing:- (i) where Late Payment Interest had not been paid completely/not paid at all till ....
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....or etc. Name of Directors/ Partners/ Proprietor as applicable for the relevant year Date of birth PAN & residential address (c) Accounts of the deductor for the relevant year showing late payments. (d) Copies of the TDS statement filed by assessee deductor. (e) Copies of challans of late deposit of TDS by the assessee deductor. (f) Copies of the intimations showing late payment interest for all the quarters of the relevant assessment year, if it is available. (g) Copies of Audit report, if they show default. (h) While collecting above information, AO(TDS) may also collect other details that may help the CIT(TDS) take a considered decision as also assist subsequent compounding proceedings (if any) viz. (a) whether the default was only in one year and no defaults took place later, (b) whether the deductor has himself rectified the mistake and deposited the tax along with interest prior to issue of notice by the department, (c) whether the same offence has been compounded earlier and if yes, how many time etc. 3.3 The AO(TDS) after collecting the above information/documents shall issue show cause notices to th....
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....e accorded. The show cause notice can be generated from the online module on TRACES, as and when the facility is made available. b. He shall after hearing the assessee and after proper application of mind clearly enunciate that while processing the cases for prosecution u/s 276B/276BB r.w.s. 278B, a fair and judicious view has been taken in view of the provisions of Section 278AA before filing the complaint(s). This should get reflected in both the sanction orders passed by the Commissioners/Directors under Section 279(1) and the complaints filed with the competent Courts: i. There is no statutory requirement for obtaining opinion of the Counsel before granting sanction for prosecution. However, given the fact that TDS offences are technical in nature, such reference could be made in complex situations like identification of accused(s) etc to avoid legal infirmities in prosecution proposals/complaints. In such cases, it should be ensured that the opinion should be obtained from the Counsel within 30 days. If after examining the opinion of the Standing Counsel, he is satisfied that it is a fit case for prosecution, he shall pass a speaking order u/s 279(1) separate....
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....other proceedings, same shall also be treated at par with other prosecutable cases as enumerated under Chapter-XVII of the Income Tax Act, 1961 and action shall be initiated in accordance with procedure as laid vide this SOP. TIME FRAME :- 4. The time period for the entire process from identification to passing of order u/s 279(1)/279(2) should be as under: S. No. Section Time limit for submitting proposal for sanction u/s 279(1) Time limit for according sanction u/s 279(1) Time limit for launching Prosecution Authority to submit proposal & launch prosecution 1 276B Within 90 days of generation of list on CPC-TDS detection of offence or receipt of information from any other source/ income tax authority Within 60 days of receipt of information from the AO(TDS) Within 30 days of receiving approval u/s 279(1) AO(TDS) having jurisdiction. 2 276BB -do- -do- -do- -do- STANDARD OPERATING PROCEDURE DEFINING THE ROLES OF DIFFERENT TDS AUTHORITIES IN ADDRESSING THE ISSUE OF PROSECUTION AND COMPOUNDING OF TDS CASES I. Role of Principal CCIT/CCIT(TDS): (i) Taking quarterly review meeting with CIT(TDS) monitoring progres....
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.... utility created in TRACES: a. On receipt of proposal from the AO(TDS). b. On issue of show cause notice to the accused / co-accused. c. On passing of sanction order u/s 279(1) or on dropping of the proceedings as the case may be. d. On receipt of compounding application / report on the compounding application. e. On filing of complaint / launching of prosecution before the competent court. f. On receipt of order of competent Court g. On appeal, if any appeal is filed. III. Role of Addl.CIT(TDS) (i) Discussing cases of list-B generated by CPC-TDS and list prepared on the basis of information received from external sources such as spot verification/survey with AO(TDS) and also guiding them in short listing the cases fit for prosecution. (ii) Monitoring timely action in all the cases involving mandatory processing for prosecution or cases identified otherwise and to report the progress to the CIT (TDS) in the monthly DO. IV. Role of AO(TDS) (i) Downloading list of cases identified by CPC-TDS for mandatory proceeding of cases (list-A). (ii) Downloading list-B of cases for identific....