CBDT's Tryst with TDS Continues - While Confused Assessee's Fate Hangs in Balance
CBDT's saga with TDS continues unabated and there appears to be no respite for the ill fated assessees. All this mess started with CBDT's Notification No. 31/2009 dated March 25, 2009 with earth shattering consequences to the assessees. The amended Rules were first made applicable from April 1, 2009. Later on it was postponed to July 1, 2009 and thereafter it sunk without a trace.
Please see our well researched articles on CBDT's TDS Fiasco listed below and also Dated 25.05.2009 and DDT 1144 Dated 01.07.2009 on this subject.
New TDS Regime - A grand fiasco for CBDT; Is outgoing FM 'aware' of policy change, richly contributing to 'Tax Misery Index'
New TDS Regime - A tale of goof-ups; TPL , TRU need to develop grip over taxpayers' pulse for improved compliance
and
New TDS Regime: TPL bulldozes its way; CBDT looks helpless! Will veteran FM intervene before mess hurts exchequer?
Now the CBDT has notified amendments to Income-Tax Rules, 1962, elaborating the procedure for deduction of TDS and its reporting mechanism. These rules are called Income Tax (First Amendment) Rules, 2010 and they shall come into force from April 1, 2009.
Rules 30, 31, 31A which deal with time and mode of payment to Government account of tax deducted at source or tax paid under sub-section (1A) of Section 192, Certificate of tax deducted at source or tax paid under sub-section (1A) of section 192 and filing of Quarterly statement of deduction of tax under sub-section (3) of section 200 were substituted with new Rules. A new Rule 31AA is inserted newly which deals with filing of Quarterly statement of collection of tax under sub-section (3) of section 206C .
A new Rule 37A is introduced after Rule 37 to deal with returns regarding tax deducted at source in the case of non-residents. Further, Rules 37CA which deals with time and mode of payment to Government account of tax collected at source under section 206C and Rule 37D which deals with certificate for collection of tax at source under section 206C (5), were substituted with new Rules. Corresponding to the substitution/insertion of these new Rules, new Forms viz., Form No. 16, Form No. 16A , Form No. 24Q , Form No. 26Q , Form No. 27A , Form No. 27EQ , Form No. 27B , Form No. 27Q and Form No. 27D were notified.
In the new Rules, various timelines were notified for effecting the tax deductions at source and filing of quarterly statements with the designated authorities. The moot point is when the amended Rules are notified on February 18, 2010 and if they are made effective from April 1, 2009, how the assessees are supposed to comply with the specified timelines for deductions as stipulated in these amended Rules and file the quarterly statements. Now can the department hold the assessees responsible for violation of these amended Rules if they are impossible to comply in future with the deadlines set in the past?
This entire exercise fits the legal maxim Lex Non Cogit Ad impossiblia where a law cannot expect the subjects to do the impossible. Above all will the CBDT explain as to what is the fate of Notification dated March 25, 2009?
And if you look at the new forms notified by the CBDT, at the end you find, “Printed from Taxmann's Income-tax Rules, 2007” Were these forms notified on 18.02.2010, effective from 01.04.2009, already covered in Taxmann's book in 2007? What then is the CBDT notifying? There seems to be something terribly wrong with the CBDT. They don't seem to be aware of their own notifications and in 2010, they say they are notifying what Taxmann published in 2007 and they want it to be effective from 2009! And why all this confusion just a week before the budget? Is there a force more powerful than the CBDT and the Finance Minister in the North Block? And is there something in the budget in this regard?
NOTIFICATION S.O. 424 (E) Dated: February 18, 2010