TaxTMI 
TaxTMI 
2016 (1) TMI 990
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...., they are heard together and disposed off by way of common order for the sake of convenience. 2. The brief facts of the case are that the assessee is a public sector undertaking which is engaged in the business of manufacture and sale of Iron and Steel products, has filed its eTDS returns in form No. 24Q. The CPC-TDS, Ghaziabad has processed the eTDS return for the 4th quarter of FY 2010-11 and intimation under sec. 200A was served on the assessee on 26-11-2013 with a demand of tax and interest of Rs. 2,53,27,830/-. On receipt of intimation under sec. 200A, the assessee has downloaded justification report from the TRACES and found that the demand was raised on account of levy of normal rate of tax for furnishing invalid PAN, non furnish....
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....ioned in category (i) and (iv) was not rectified, because even now few employees have not furnished correct PAN. The assessee further submitted that for such discrepancies, the tax was calculated at 20% without even allowing basic exemption limit, which has an adverse impact in the case of employees, whose income is subject to tax at progressive rate of taxation. The assessee further submitted that demand can be made against the assessee, only when there was a failure on the part of employees in the payment of tax. To this effect placed its reliance on the following two decisions. (i) Jagran Prakashan Ltd vs. DCIT (2012) 345 ITR 288 (All)(ii) Allahabad Bank vs. ITO(TDS), Algarh in ITA No. 448 to 454/Agra/2011. The CIT(A), after considering ....
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....the tax was calculated at 20% without even allowing basic exemption limit, which has an adverse impact in the case of employees, whose income is subject to tax at progressive rate of taxation. The assessee further submitted that demand can be made against the assessee, only when there was a failure on the part of employees in the payment of tax. To this effect placed its reliance on the following two decisions. (i) Jagran Prakashan Ltd vs. DCIT (2012) 345 ITR 288 (All)(ii) Allahabad Bank vs. ITO(TDS), Algarh in ITA No. 448 to 454/Agra/2011. Therefore, requested to set aside the order of CIT(A). 5. On the other hand, the D.R. strongly supported the order of CIT(A). The ld. D.R. submitted that the CIT(A) has considered the assessee request....
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....he Data of the employees at the time of filing the eTDS returns. In the rectification statements, most of the defaults referred to in TRACES have been rectified with correct PAN numbers. But, in few cases, it was unable to rectify the defaults with correct PAN, as there was mismatch in PAN furnished by the employees. The assessee has taken all out efforts to collect PAN numbers from each employee. In spite of repeated reminders, few employees did not furnished PAN for various reasons. However, the correct amount of TDS recoverable from the payments have been deducted and paid to the Govt. Account. There is no short fall in recovery of TDS as per law. The short deduction was determined by applying higher rate of TDS without even deducting ba....
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....rce in the arguments of the assessee, for the reason that the payment covered under dispute is salary to employees. TDS on salary shall be deducted in the manner specified under sec. 192 of the Act, after allowing basic exemption limit and deductions towards investments in savings scheme etc. Unlike other provisions of TDS, TDS on salary cannot be deducted by applying flat rate of tax on gross payment. Therefore, sec. 206AA provides for higher of the three, i.e. at the rates specified in the relevant provisions of the Act, or at the rate or rates in force or at the rate of twenty percent. It is not necessarily that all payments are comes under 20% flat rate, in some cases the rate of tax may be at 10% and in some cases it may be at 30%. Unl....