En masse issue of prosecution notices to small cos for minor TDS default misleading: CBDT

New Delhi: The Central Board of Direct Taxes (CBDT) has clarified that the news of issuing en masse prosecution notices to small companies for minor TDS defaults, are completely misleading and full of factual inaccuracies

The apex policy making body of the Income Tax department said, “ Mumbai Income Tax TDS office has issued prosecution Show Cause Notices only in  a limited number of big cases where more than Rs 5 lakh of tax was collected as TDS from employees etc and yet the same was not deposited with the Income Tax Department in time.”

CBDT said that some defaulter companies and vested interests are deliberately misleading the media to thwart action against themselves.  

CBDT stated that in last one month, only in 50 big cases prosecution notices have been issued by Mumbai IT TDS office. Out of these, in 80 percent of the cases the TDS tax default is above Rs 10 lakh and in 10 percent cases, TDS default is between Rs 5 to Rs 10 lakh. In the remaining 10 percent cases, TDS default is of more than Rs 1 crore as detected in the survey.

Prosecutions have also recently been launched against 4 big business houses where more than Rs 50 crore of tax was collected by them from the tax payers and yet not deposited with the government in time, CBDT said.

“But such legal and rightful action is being unfortunately projected in the media by the vested interests as if the Department is going overboard to harass small employers,” it added.

CBDT further said that in a country of 130 crore people where around 6 crore returns are filed every year, only a total of 1400 prosecutions have been filed so far for various offences under the Income Tax Act during this financial year.  

“This, by any stretch of imagination, cannot be termed as mass harassment by the income tax department. Therefore, to say that prosecution notices enmasse have been sent to taxpayers for minor defaults is completely incorrect and misleading”, the CBDT added.