The Income Tax Department has recovered a substantial sum of Rs 84 lakh in Tax Deducted at Source (TDS) dues from a prominent cotton trading company based in Chhatrapati Sambhajinagar. This recovery, which includes Rs 13 lakh in applicable interest, followed a day-long survey operation conducted at the firm's office premises on Wednesday.
Survey Uncovers Major TDS Non-Compliance
Officials from the local Income Tax Office (TDS) carried out the survey as part of a targeted drive to identify entities failing to adhere to TDS regulations. During a meticulous examination of the company's books of accounts, financial statements, and other relevant documents, a significant lapse was uncovered.
The investigation revealed that the firm had allegedly paid interest amounting to approximately Rs 20 crore without deducting any TDS, as mandated by law. This action directly contravened Section 194A of the Income Tax Act, 1961.
Violation of Section 194A and Dual Default
Section 194A requires any person or entity making interest payments beyond a prescribed limit to deduct TDS at a rate of 10% at the time of payment or credit. The company's failure to do so meant a large chunk of tax that should have been collected at source never reached the government's coffers.
In a further discovery, the tax team found that the company had also defaulted on depositing TDS amounts it had already deducted from other transactions. The outstanding principal amount for this default was estimated to be around Rs 71 lakh. The department successfully recovered this entire sum, along with the accrued interest, during the survey operation itself.
Broader Drive for TDS Compliance
Officials privy to the action stated that this survey is a component of the Income Tax Department's sustained efforts to bolster compliance with TDS provisions. TDS is a critical mechanism for ensuring a steady flow of tax revenue and preventing potential leakage.
The department has issued a stern reminder to all companies, firms, and entities responsible for deducting TDS. They must strictly follow the provisions of the Income Tax Act. Timely deduction and prompt remittance of TDS to the central government are mandatory legal obligations.
Non-compliance, such as non-deduction or non-deposit of TDS, not only attracts interest liabilities but can also lead to further penal proceedings under the law. A senior official confirmed that the department will undertake a detailed examination of all documents and information gathered during the survey before deciding on any further necessary action.
