INCOME TAX RETURNS WITH CLAIM FOR CREDIT OF TDS AND TCS NEED MORE TIME – DUE DATE SHOULD BE POSTPONED IN SUCH CASES.

[CA DEV KUMAR KOTHARI]

Synopsis:

Author has tried to make out case for allowing longer time to file ROI with claim for TDS/ TCS, payment of advance tax  and particularly where there is case of refund or no tax is payable after considering TDS/ TCS and advance tax paid.

 The AO / AO (CPC) should also be allowed to extend due date or condone delay in filing of ROI in such cases and no penalty or fees should be charged for delay in filing of ROI.

Income Tax Return with claim for TDS TCS:

Any person filing ROI with claim for credit of tax based on TDS and TCS have to be more careful regarding several aspects like:

1. To make full claim for TDS and TCS in original return on safer side. If not he ahs to file revised ROI for further claims of TDS/ TCS which are found after filing of ROI.
2. To reconcile income with TDS, TCS in his case. There can be several reasons for differences. Unless TDS/ TCS is reconciled, there can be case of undisclosed income.
3. To ensure that person who is liable to deduct or collect tax has deducted / collected and also paid, so that TDS/TCS is found credited and reflected in his report in form 26AS.
4. In case any tax deductor / collector has not deposited tax deducted and collected, he will not get its reflection in for 26AS he has to take steps for remedial action by deductor/ collector so that money belonging to him and deducted or collected is not lost.
5. If TDS/ TCS is not reflected in form 26AS, there can be short fall in payment of tax and instalments of advance tax for no fault  on part of assesse from whom tax has been deducted or collected.
6. If ROI is filed without ensuring full TDS/ TCS reflected in report in form 26AS, and there is tax payable, assesse would be liable to pay tax with interest, and that will be computed by system and unless tax and interest is paid, return may not be accepted.  Even if accepted and filed, it can be treated as defective ROI or ROI non est. depending on situations.
7. Reconciliation with form 26AS for taxes paid, deducted, collected is an important tool and a necessary exercise to ensure that income and taxes are properly accounted for and / or included in income.

Cases of delay in reflection of TDS/ TCS:

There can be several reasons for delay in reflection of TDS/ TCS in form 26AS like:

1. Late payment of TDS/ TCS ,
2. Late filing of Return of TDS/ TCS,
3. Defects in data entry at the time of payment of TDS/ TCS
4. Defect in   data entry at the time of filing of return of TDS / TCS.
5. Data distortion in processing.

TDS/ TCS are part of advance tax:

While computing instalment of advance tax, TDS / TCS for whole year is considered. Therefore, if there is short fall in TDS/ TCS reflected in form 26AS, assesse would be liable to pay higher instalments of advance tax, and in case of short fall he will also be liable to pay interest.

No loss to revenue if ROI due date is postponed by few month:

Where major part of tax is paid by way of TDS/ TCS and advance tax. And assesse files ROI with claim for refund, then there is no loss to revenue if ROI is filed few months late.

In such cases due date should be fixed as 31^st December instead of 30^th July, and 30^th September.

Reasonable due date will avoid many unproductive work:

Fixing a reasonable date to file ROI will help to file ROI after all reconciliations are made, then there will be lesser number of problems causing unreconciled TDS/ TCS, revised ROI, and the tax department claiming understatement of income and initiating proceedings, if later on more TDS / TCS is found credited in account of any assesse.

Assessee is looser and revenue is gainer for delay:

Where there is ROI with claim for refund, and refund is allowed. The assesse loose interest for period of delay and the government is gainer for the same.

The person filing ROI with claim for refund is not gainer rather he is looser of interest and also suffer delay in refund.

Therefore, in case of TDS/ TCS  Advance tax ROI, where assesse has not to pay any further tax and /or is also eligible for refund, first of all due date should be such that a longer time is allowed so that satisfactorily ROI can be filed after all reconciliations and confirmations and  rectifications etc in TDS and TCS matters.

Extension of due date or condonation of delay by AO

The AO and AO (CPC) should also be allowed to extend due date when there is a reason related with delays about TDS/ TCS etc.  

No penalty or fees for delayed filing:

Where a ROI is filed with a claim for refund and refund is in fact allowed and also where there is no tax payable, there should not be any kind of penalty or fine or late filing fees.

Due date for ROI with TDS/ TCS should be extended:

Revised due date that is 31.08.2019 for AY 2019-20 should be further  extended to 31.12.19 in case of ROI with claim for TDS/ TCS.