Non Issue of TDS Certificate Will Make Deductor Liable To Penalty

There is clear provision under section 203 of the I T Act which compels the deductor to give a TDS certificate to the person whose case tax has been deducted.Section 203 of the I T Act …..

• 203. (1)Every person deducting tax in accordance with the foregoing provisions of this Chapter shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.

CBDT issued Circular : No. 785, dated 24-11-1999. which stated that issue of certificate for tax deduction at source under section 203 is mandatory in all cases where tax is deducted at source, including cases where payments are made ‘net of tax’ in terms of section 195A.

The TDS certificate has to be issued within the same month in which the tax was deducted or if deducted on last day of the financial year , then one week from the date of deduction.

Section 272A(2g) provides for penalty of Rs 100 per day of delay.The power to impose penalty is with Joint commissioner of Income Tax. Accordingly, you should take following steps

1. write a letter to the deductor ,stating clearly the number of days of delay
2. If still the TDS certificate is not issued, write to CIT (TDS) stating the facts of the case and praying for issue of direction to the TDS deductor for issuance of certificate.
3. Give a copy of the letter to the A.O and Jt.CIT who is assessing your case.
4. Claim TDS in your return and attach the copies of letter written to the deductor and CIT.