Introduction
Delayed TDS payment is a common compliance slip for many businesses and individuals. In a recent case, the Jharkhand High Court quashed penalty proceedings under the Income Tax Act, noting that the taxpayer had already paid the due tax with interest. This blog simplifies the case and its implications for Indian taxpayers.
Background of the Case
- The assessee had delayed remittance of TDS.
- The Assessing Officer initiated penalty proceedings under Section 221 for default.
Key Legal Points
| Particulars | Details |
|---|---|
| Relevant Sections | Section 201(1A) (interest on TDS default), Section 221 (penalty for default) |
| Court’s View | Penalty not justified if tax and interest paid |
| Impact | Relief for genuine taxpayers facing double penalty |
| Case Citation | M/s Purbanchal Vidyut Vitran Nigam Ltd. vs. PCIT (Jharkhand HC) |
Implication for Taxpayers
Delayed TDS payment may invite:
- Interest under Section 201(1A)
- Penalty under Section 221 (in some cases)
However, this judgement shows that courts can quash penalty if:
- TDS is fully paid.
- Interest is cleared.
- Delay is not intentional or repeated.
Expert Tip
✅ Practical Advice: Always clear pending TDS dues with interest before proceedings escalate. Document reasons for delay and maintain proof of payment.
FAQ on Delayed TDS Payment
Q1. Can penalty be avoided if I pay TDS late with interest?
Yes, based on this HC ruling, penalty may be dropped if you pay tax plus interest and show genuine reasons.
Q2. What interest rate applies under Section 201(1A)?
Generally, 1% per month from due date till payment.
Q3. Should I appeal penalty orders?
Always consult a tax expert. This ruling helps, but facts vary.
Summary for Google Snippet
Jharkhand HC quashed penalty for delayed TDS payment, stating that paying tax with interest suffices. This offers relief to taxpayers who clear dues genuinely. Learn compliance tips with Efiletax.
Conclusion
The Jharkhand HC’s decision on delayed TDS payment brings relief to taxpayers facing multiple penalties. To avoid hassles:
- Deduct and deposit TDS on time.
- If delayed, pay with interest promptly.
- Seek professional help for notices.