Non deduction or short deduction of TDS on interest - 194A - Income Tax - 537/CBDT

INSTRUCTION NO. 537/CBDT Dated : March 31, 1973 Section(s) Referred: 194A Statute: Income - Tax Act, 1961 The Public Accounts Committee in para 2,383 of their Report (1972-73) have observed as under:- 'The Committee are distressed to note the non-deduction or short deduction of tax at source on interest payments and delayed remittance of tax deducted which also did not attract the penal provisions of the Act. Such serious lapses noticed in test check of cases by Audit should have compelled the Department to undertake a review in all the Charges to find out the extent of failure and to take appropriate action including rectification and recovery which, however, surprisingly enough were not done. The Committee expects that such review should be done without further delay and the results intimated to me." The context of the above noted concluding recommendations is provided by paras 2.372-82 of the Committee Report vide copy printed below. 2. The Committee's observations about I.T. Department's omission to deduct tax at source from the interest paid by them to the assessees is under Board's consideration. As regards the other recommendation about the checking up of failure of other agencies in complying with the provision of section 194-A, the Board desire that an immediate review be carried out in all Charges to ascertain the extent of non-deduction/short deduction of tax at source on interest payments and delayed remittance of tax deducted at source. The review should cover (i) the arrangements for watching and enforcing compliance, (ii) cases of omission or failure noticed and remedial action taken, and (iii) suggestions for improvement to ensure proper implementation of the provision. 3. The result of review suggested above may be intimated to the Board by 31-5-1973.