What You Must Check In Your TDS Certificates, Form 26AS & Why They Should Match

1. TDS certificates should be downloaded only from TRACES 

You should ensure that TDS certificates (Form 16/16A) issued to you are downloaded only from TRACES (TDS Reconciliation Analysis and Correction Enabling System of the Income tax department). Certificates downloaded from TRACES are in a specific format. A form downloaded from TRACES would bear a 7 character alphabet unique certificate number and it will also have a TDS- CPS logo on the left side and a national emblem on the right side at the top. This certificate would provide the details of the income paid to you and also the tax deducted from that income by the payer and whether the same has been deposited by him with the government. See below for a sample of how a valid TDS certificate in Form 16 or Form 16A should look.

2. Digital signature should be verified. 

In case of digitally signed certificates check that the signature is verified i.e. has a check mark across it. An unverified signature will bear a question mark over the signature instead of the check mark. 

3. Must check details on the TDS certificate 

Your name, PAN, Deductor's TAN, amount paid to you, TDS amount should be correctly reflected on the TDS certificate. 

4. What is Form26AS and how to get it 

• An annual tax credit statement is generated by the income tax department for a person subjected to TDS (deductee) in Form 26AS. The statement provides details such as name of the deductee, PAN of deductee, details of deductor, the TDS amount, the amount of TDS deposited with the Government by the deductor etc. 
• The user can download the statement from the income tax e-filing website. The downloaded statement is password protected and the password to open the file is the Date of birth of the user which he would have entered when registering with the income tax e-filing site. 

This statement is linked to your PAN and contains details of all your TDS -by employers as well as others (e.g. banks etc). 

This statement is linked to your PAN and contains details of all your TDS -by employers as well as others (e.g. banks etc). 

The link to download Form 26AS from TRACES can be found after logging into your account on the income tax e-filing site. 

https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=taxCred 

It can also be downloaded via your net banking account provided that your bank provides the e-filing login facility. The list of banks providing this facility is available at: http://contents.tdscpc.gov.in/en/netbanking.html 

5. Cross check the TDS certificate figures with Form 26AS 

You can verify whether your TDS -as shown in the TDS certificate received from the deductor --has actually been received by the government or not by comparing with the Form 26AS. It is the duty of a taxpayer to verify whether the deductor has deducted tax on each transaction on which it was supposed to be deducted. He must also check that the TDS mentioned in form 16/16A is reflecting in Form 26AS. In case the TDS shown in your TDS certificate is not reflecting in your Form 26AS it would imply that although the deductor has deducted the tax on your behalf but the TDS has not been deposited / has not reached the income tax department. In case of any discrepancy between the TDS certificates and Form 26AS inform your deductor and ask for the reasons for this discrepancy and get it corrected. A possible reason behind the mismatch can be because your PAN has been incorrectly entered in the records of the deductor. In case the deductor has not deducted the tax on your behalf, then it is your responsibility to remind the deductor to deduct tax on your behalf and deposit the same with government. 

Your form 26AS will also reflect any advance/regular/ self assessment tax that you pay. 

Following details would also be available in your Form 26AS in case applicable: 

• Details of tax deducted on your behalf by deductors 
• Details of tax collected on your behalf by collectors 
• Details of tax deducted on sale of Immovable Property 
• Refund received during the financial year by you 
• Details of your transactions in Mutual Fund, Shares and Bonds, etc. (as reported by AIR filer) 
• TDS Defaults related to processing of Statements 

A person deducting tax on account of buying an immovable property needs to submit TDS certificate to the seller in Form 16B. Link to download Form 16B (Tutorial) http://contents.tdscpc.gov.in/en/download-from16b-etutorial.html 

According to practicing chartered accountants, the income tax department normally cross checks the taxes claimed as TDS or as paid by you in your return with those showing in Form 26AS. "Therefore, in case certain taxes claimed as deducted or paid by you in your return are not reflected in the Form 26AS then you may get a notice from the tax department when it processes your return" says Chartered Accountant Anil Kapur, Partner, AVAN & Associates. 

6. Why you need TDS certificates when Form 26AS provides all information 

One can gather all information related to TDS in Form 26AS which is sufficient to file one's return. This might make you doubt the importance of TDS certificates but the rationale behind introducing Form 26AS is to enable the taxpayer to cross check the details mentioned in his/her TDS certificates with those mentioned in Form 26AS and create transparency. TDS certificates are important because these certificates and the Form 26AS are a cross check for each other-in case there is a mismatch you can try to get the relevant document corrected. Without the TDS certificate you would not get to know if there was a mismatch. 

Further, if your return sails through the IT department's e-processing system without a hitch then your TDS certificates may not be required to be shown/submitted but in case your return gets picked up for scrutiny then you are likely to need your TDS certificates to show to the IT department. Also, in case a TDS is not reflecting in the Form 26AS then again you would need the certificate to prove that tax was actually deducted. 

"In case of salaried persons, Form 26AS in itself is not sufficient to file the return since it does not show the breakup of your income and details of deductions claimed under section 80C to 80U which are available in Form 16" Kapur adds. 

7. Why you must provide PAN to the deductor 

It is the duty of the assessee/deductee to provide his PAN to the deductor or else the deductor will deduct his tax at a higher rate (generally 20%). Also, if PAN is not provided the TDS will not reflect in your Form 26AS which is linked to your PAN. This is because the deductor will not know which PAN to assign the TDS to while uploading data in the income tax site. 

Source : The Economic Times

Amendment in Rule 114H of Income-tax Rules, 1962

The Rule 114H of the Income-tax Rules, 1962 (the Rules) has been amended vide Notification No.48/2016 [S.O.2151(E)] dated 20th June 2016.

In order to provide sufficient time to the reporting Financial Institutions for completing the due diligence procedure in respect of other reportable account referred to in Rule 114H (3)(d)(ii), which is high value account as on 31st December, 2015, the timeline specified for review of pre-existing individual account has been extended from 30th June, 2016 to 31st December, 2016. The timeline in case of U.S. reportable account which is low value account as on the 30th June, 2014, shall continue to be 30th June, 2016.

Similarly, in respect of other reportable account referred to in Rule 114H(5)(e)(i), timeline specified for review of pre-existing entity account has been extended from 30th June, 2016 to 31st December, 2016. The timeline in case of a U.S. reportable account shall continue to be 30th June, 2016.

The full text of the notification is available on the departmental website www.incometaxindia.gov.in. 

Source:-PIB

INCOME TAX – NEW DISCLOSURE NORMS IN ITR

Know the new disclosure norms in income tax return forms

• Amendments in the ITR forms are a move towards creating an environment of greater disclosure and tax transparency
• The Central Board of Direct Taxes has released new return forms to be used for filing tax returns (ITR). The amendments brought in the ITR forms are a move towards creating an environment of greater disclosure and tax transparency, although this may be viewed as an additional compliance burden by some.

The amendments in tax return forms are largely similar and simultaneous with changes being brought about in tax reporting across the globe. In 2015, Russia, for example, introduced additional tax reporting for tax residents, who have to notify Russian tax authorities about companies in which they hold more than 10% and about “structures” (trusts, foundations) where they participate in the role of founder, beneficiary, guardian, or others, as well as about the holding structure. The UK was the first to sign an enhanced automatic tax information exchange agreement in September 2012, together with the US, to accomplish the reporting required under US Foreign Account Tax Compliance Act (Fatca). Fatca has now been signed or agreed in substance by about 119 countries, including India. The Organisation for Economic Co-operation and Development, supported by the G20 nations, released a 15-point action plan against base erosion and profit sharing, to protect international economic system and facilitate an equitable tax architecture.

In India, ITRs for financial year 2015-16 (FY16) are due to be filed by 31 July 2016 (except those liable to tax audit or transfer pricing for whom due date is 30 September 2016 or 30 November 2016). Significant changes have been brought in the forms applicable for FY16. This is clearly indicative of the government’s focussed strategy on tax reporting. These are some of the changes.

Introduction of Schedule PTI: This is to be used to report details of pass through income received by investors from business trusts or investment funds. This schedule has been inserted in all ITR forms except ITR-1 (which is used by individuals with salary, one house property and income from other sources). The schedule intends to capture details of income from different sources under the pass through mechanism received by investors in funds such as venture capital funds or real estate investment trusts.

Under the pass through mechanism, income distributed by such funds is taxable directly in the hands of investors and not in the hands of the funds. The funds are required to report to the tax authority, details of investors and income distributed. Reporting by investors in their tax returns will help the tax authority reconcile the data and track defaulters.

Reporting of assets in Schedule AL for taxpayers with income above Rs.50 lakh: Schedule AL and also instructions to ITR form do not expressly provide that only India assets have to be reported in this Schedule. But where a taxpayer holds foreign assets, either as a legal or beneficial owner, he has to file his tax return in ITR-2 and report his foreign assets in Schedule FA. Since foreign assets and income are separately reported in Schedule FA, it appears that Schedule AL will capture details of those assets that are not captured under Schedule FA, i.e., India assets.

Assets to be reported include immovable assets, cash in hand, jewellery, bullion, vehicles, yachts, boats and aircraft at cost. Financial assets like stocks or funds are not included. There is no need to get a valuation report. If an asset was acquired by inheritance or gift, it would be required to be reported at cost to the previous owner of the asset, increased by the cost of improvement.

Since wealth tax has been done away with, the need to disclose details of assets and liabilities as part of ITR may help the tax department monitor an individual’s assets and corresponding sources of investment. What is different from wealth tax reporting is that there is no threshold for cash reporting, so even small amounts might have to be reported. At the same time, reporting assets would also help cross check taxation of corresponding incomes.

Taxpayers should be careful in declaring foreign incomes and assets. A default can attract Black Money Act’s stringent provisions.

Additional reporting in Schedule IF for partnership firms:This Schedule in ITR-4 requires information about the partnership firm in which taxpayer is a partner. The taxpayer (in addition to details such as name of the firm, profit sharing ratio, capital balance, and others) is now required to report whether the firm had entered into any international transaction or specified domestic transaction during the year and whether the same has been reported by the firm in prescribed report.

Details of tax collected at source (TCS) under Schedule TCS: TCS constitutes tax paid on behalf of the taxpayer. This inclusion would help the taxpayer take credit of these taxes in his tax return. For example, if A buys jewellery worth Rs.6 lakh in cash in a single transaction, she has to pay TCS of 1% to the seller over and above purchase price. She can claim credit for this in her ITR. She will also have to offer the income from which cash was generated to tax and also report the jewellery in Schedule AL.

This change is all the more relevant because from 1 June 2016, the scope of TCS is proposed to be expanded to cash purchase of all goods and services in excess of Rs.2 lakh (except where buyer has deducted tax on such payments).

The government is focussing on non-traditional methods of garnering tax revenue and is adopting an active strategy to tap wealth stashed in illegitimate investments or parked abroad illegally. Media reports on Liechtenstein, HSBC accounts and Panama Papers, and the wave of tax activism are clearly adding to the political pressure on governments to better track income and ensure tax payment. The Supreme Court of India is also active on this front and has set up a Special Investigation Team on black money. Digitisation and increasing connect between tax authorities worldwide have come in as handy to improve tax enforcement.

However, some of these changes may pose difficulty to taxpayers. For instance, if assets were acquired many years back and records are not easily traceable or the taxpayer has received assets by way of gift or inheritance.

It also needs to be clarified whether cash reporting includes reporting of foreign currency held in India within the permissible limits of exchange control legislation. Foreign currency has traditionally been seen as a ‘commodity’ in judicial precedents, so a view may be that the intention of this amendment is to keep such foreign currency outside the purview of reporting under Schedule AL. Also, it is uncertain how these challenges will go down with assessing officers, and whether estimated values will be acceptable at the lower tax authority level.

This fast paced environment of tax reform also mandates the taxpayer to be better prepared for compliance. A tax scrutiny poses not only a risk of penalties, but also public naming and shaming.

With time, I am hopeful, that the government will clarify on such ambiguities. The success of these steps will lie in ‘balance’ between appropriate tax reporting by the tax payer and display of maturity and security by the government in handling information so that the taxpayer is not harassed.

Standard Operating Procedure for Prosecution in Cases of TDS/TCS Default

STANDARD OPERATING PROCEDURE FOR PROSECUTION IN CASES OF TDS/TCS DEFAULT

Introduction:

1.1 As per the Income Tax Act, all cases where TDS/TCS is deducted but not deposited within the due date, as prescribed, are punishable u/s 276B/276BB or 278A. The selection of cases & their processing is further governed by Instruction F.No. 285/90/2008-IT(Inv-I)/05 dated 24.04.2008 which has been modified by the CBDT [vide F.No.285/90/2013-IT(Inv.)] dated 07.02.2013. Presently, the monetary limit specified for cases to be considered for prosecution is as under: 

(i) Cases, where amount of tax deducted is Rs.1,00,000 or more and the same is not deposited by the due date prescribed under the Income Tax Act, 1961 read with the Income Tax Rules, 1962 shall mandatorily be processed for prosecution in addition to the recovery. 

(ii) Cases, where the tax deducted is between Rs.25,000 and Rs.1,00,000 and the same is not deposited by the due date prescribed under the Income Tax Act, 1961 read with the Income Tax Rules, 1962 may be processed for prosecution depending upon the facts and circumstances of the case, like where there are instances of repeated defaults and/or tax has not been deposited till detection. 

1.2 Thus, the present Instructions envisage two categories of cases for prosecution in TDS related offences; the first category is cases which are mandatorily to be processed (TDS of more than Rs. 1,00,000 deducted but not deposited before due date) and the second category is defaults between Rs. 25,000/- to 1,00,000/- which may be processed depending upon facts and circumstances of the cases.

Identification of cases:

2.1. CPC-TDS/TRACES will generate a list of prosecutable cases for mandatory processing for prosecution (List-A) in accordance with the criteria laid down by the CBDT vide it’s instruction dated 07.02.2013 or any other modified criteria, if the same is done in view of suggestions made in this regard. Such identification shall be done within one month of the filing of the quarterly TDS statement. CPC – TDS following the Instruction dated 07.02.2013, adopted following two parameters for identifying prosecutable case for mandatory processing:-

(i) where Late Payment Interest had not been paid completely/not paid at all till that date; 

(ii) where deduction had been made but no challan was available in the account of the deductor i.e. the amount was not at all paid to the Government account. (Vide F.No. CPC(TDS)/Prose_cases/2014-15 dated 15.09.2014, limit of Rs. 1,00,000/- for the cases of Late Payment Interest and for Short Payment all the cases have been approved.)

2.2 CPC-TDS will generate another list of cases(List-B) involving defaults of delay in payment of Rs. 25,000 to Rs. 1,00,000/- along with default sheets for the year as well as preceding year and subsequent year ( if details are available), within one month of the filing of the quarterly TDS statement, to help AO(TDS) to identify cases fit for prosecution based on facts and circumstances of the case. The AO(TDS) can identify the cases from second list and also from the information gathered from external sources to complete identification of second category of cases and enter them in prosecution register maintained manually or on utility to be provided by CPC-TDS. 

2.3 It may be noted that the TDS cases, otherwise dealt by the International Taxation Division, with respect to payments made to non-residents also required to be dealt with in the same manner as other cases under Chapter-XVII of the Income Tax Act, 1961. 

2.4 In cases of default in furnishing the quarterly TDS statement, CPC-TDS shall generate the list of such non-filers within one month from due date and communicate to the AO(TDS) for issue of notice and further pursuit. 

Procedure for launching prosecution

3.1 After identification of potential cases for prosecution by the CPC – TDS in case of mandatory processing or otherwise, it should be entered in the ‘Prosecution register’ maintained in Form–C (page 74 of the Prosecution Manual) and to be reported to the CIT(TDS) who shall also maintain the prosecution register in Form–D (page 75 of the Prosecution Manual). Till a specific module in CPC-TDS is made functional for having control on prosecution proceedings, the entries may be made in manual register.

3.2 Following information/documents regarding the deductor may be collected by the AO(TDS) once the case is identified for processing : 

(a) Details of the company/ firm/ individual 

Name of the company/ firm/individual

Present address

PAN Number

TAN Number

(b) Details of its directors/ partners/ proprietor etc. 

Name of Directors/ Partners/ Proprietor as applicable for the relevant year

Date of birth

PAN & residential address

(c) Accounts of the deductor for the relevant year showing late payments. 

(d) Copies of the TDS statement filed by assessee deductor. 

(e) Copies of challans of late deposit of TDS by the assessee deductor. 

(f) Copies of the intimations showing late payment interest for all the quarters of the relevant assessment year, if it is available. 

(g) Copies of Audit report, if they show default. 

(h) While collecting above information, AO(TDS) may also collect other details that may help the CIT(TDS) take a considered decision as also assist subsequent compounding proceedings (if any) viz. (a) whether the default was only in one year and no defaults took place later, (b) whether the deductor has himself rectified the mistake and deposited the tax along with interest prior to issue of notice by the department, (c) whether the same offence has been compounded earlier and if yes, how many time etc. 

3.3 The AO(TDS) after collecting the above information/documents shall issue show cause notices to the person responsible for deduction (directors/principal officers/partners/members/ karta), within 45 days of receipt of the list of prosecutable cases from CPC-TDS in accordance with Sections 278B/278C r.w.s. 276B/276BB of the Income-tax Act, 1961. 

3.4 It may be ensured that the reply is furnished within 30 days of the issue of the show cause notice. In case no reply is furnished within 30 days, it shall be presumed that the person responsible for deduction has no cause to state and the matter may be pursued further. 

3.5 The AO(TDS) shall examine the reasons/reply for non-compliance and will prepare the proposal in Form ‘F’ (as prescribed in Prosecution Manual) and send it to the CIT(TDS) through proper channel. Separate proposal should be submitted for separate assessment years. The Form ‘F’ will indicate inter alia, the following: 

(a) The facts indicating the commission of offence. 

(b) Chronology of events, primary & secondary evidences to establish the offence. 

(c) Present stage of the proceedings relating to the commission of offence. 

(d) List of documentary evidences including depositions, submissions to prove the offence. 

(e) List of witnesses on which the departmental case depends. 

(f) Any other facts or evidence to establish the offence. 

(g) It has to be clearly mentioned in the proposal whether the offence is second or subsequent offence in terms of Section 278A. 

An entry can be made by the AO(TDS) in the Form ‘C’ (manual register or the specific module for prosecution as and when developed on TRACES) as soon as the proposal is moved.

3.6 While the AO(TDS) will mandatorily refer all the cases of TDS default exceeding Rs.1 lakh to CIT(TDS), cases of defaults between Rs.25000-Rs.1lakh shall be referred to the CIT(TDS) only if he is satisfied that it is a case fit for prosecution. The report to CIT(TDS) shall be submitted within 60 days of the issue of show cause notice. Time granted to furnish the reply may be excluded from this time limit.

3.7 The CIT(TDS) is the competent authority to accord sanction u/s 279(1). He shall: 

a. If he is of the opinion that the case is prima facie fit for prosecution, then, issue show cause notice(s) to all proposed accused(s) u/s 276B/276BB r.w.s. 278B of the I.T. Act as to why sanction for launching of prosecution should not be accorded. The show cause notice can be generated from the online module on TRACES, as and when the facility is made available. 

b. He shall after hearing the assessee and after proper application of mind clearly enunciate that while processing the cases for prosecution u/s 276B/276BB r.w.s. 278B, a fair and judicious view has been taken in view of the provisions of Section 278AA before filing the complaint(s). This should get reflected in both the sanction orders passed by the Commissioners/Directors under Section 279(1) and the complaints filed with the competent Courts: 

i. There is no statutory requirement for obtaining opinion of the Counsel before granting sanction for prosecution. However, given the fact that TDS offences are technical in nature, such reference could be made in complex situations like identification of accused(s) etc to avoid legal infirmities in prosecution proposals/complaints. In such cases, it should be ensured that the opinion should be obtained from the Counsel within 30 days. If after examining the opinion of the Standing Counsel, he is satisfied that it is a fit case for prosecution, he shall pass a speaking order u/s 279(1) separately for each assessment year. 

ii. In case he is not satisfied after receiving reply, he shall drop the proceedings. 

An entry shall be made by the CIT(TDS) in the prosecution register or in the utility as and when available in TRACES on passing of such orders as mentioned in para (b) above or as soon as the decision to drop proceedings is made. The CIT(TDS) shall complete the process and pass an order u/s 279 sanctioning prosecution or dropping the show cause notice within 60 days of receipt of the proposal.

3.8 The assessee deductor can at any stage of the proceedings, file a compounding application before the Pr. Chief Commissioner of Income-tax/Chief Commissioner of Income-tax. Instruction vide F.No.285/35/2013-IT(Inv.V)/108 dt. 23.12.2014 should be followed in dealing with the compounding applications. If a person who has committed an offence(s) under S.276B/276BB files an application for compounding of the said offence(s), the application should be processed on priority basis and mandatorily be disposed off within the time frame as prescribed by the Central Action Plan guidelines. During the pendency of the compounding application, the CIT(TDS) shall keep the prosecution proposal pending. However, if the application is not decided within the prescribed time, the CIT(TDS) shall proceed to file the complaint. As soon as an application for compounding is moved, an entry should be made in the prosecution register maintained manually or in the utility as and when available in TRACES. Entries of subsequent action on compounding application shall also be made in such register.

3.9 The CIT(TDS) after according sanction u/s 279(1) shall send back the records to the authority seeking sanction with sanction order in duplicate, one for filing in the Court with complaint and other for the record. 

3.10 The AO(TDS) shall, after entering receipt of the sanction order in the prosecution register maintained by him, ensure that the complaint is launched in the competent Court having jurisdiction over the place where the offence is committed. 

3.11 The CIT(TDS) & the AO(TDS) shall both make an entry in the respective registers maintained manually or in the utility as and when available in TRACES. 

3.12 Similarly, if any such prosecutable offence comes to light during the proceedings before the appellate authorities, revision authorities or any other proceedings, same shall also be treated at par with other prosecutable cases as enumerated under Chapter-XVII of the Income Tax Act, 1961 and action shall be initiated in accordance with procedure as laid vide this SOP.

TIME FRAME :-

4. The time period for the entire process from identification to passing of order u/s 279(1)/279(2) should be as under:

S.No.	Section	Time limit for submitting proposal for sanction u/s 279(1)	Time limit for according sanction u/s 279(1)	Time limit for launching Prosecution	Authority to submit proposal & launch prosecution
1	276B	Within 90 days of generation of list on CPC-TDS detection of offence or receipt of information from any other source/ income tax authority	Within 60 days of receipt of information from the AO(TDS)	Within 30 days of receiving approval u/s 279(1)	AO(TDS) having jurisdiction.
2	276BB	-do-	-do-	-do-	-do-

STANDARD OPERATING PROCEDURE DEFINING THE ROLES OF DIFFERENT TDS AUTHORITIES IN ADDRESSING THE ISSUE OF PROSECUTION AND COMPOUNDING OF TDS CASES

I. Role of Principal CCIT/CCIT(TDS):

(i) Taking quarterly review meeting with CIT(TDS) monitoring progress in all cases identified for prosecution. 

(ii) Apprising the Zonal Member of the progress/ outcome made during the month through monthly DO. Copy of such progress shall also be sent to Pr. DGIT(Admn.), New Delhi for information and monitoring. 

(iii) Disposing all compounding petitions received expeditiously and within the time period prescribed in the Central Action Plan. While disposing off compounding petitions, speaking orders are expected to contain those facts based on which a fair and judicious view has been taken in accordance with relevant provisions of the Income Tax Act, 1961. 

II. Role of CIT(TDS)

(i) Ensuring that the Guidelines issued vide F.No.285/35/2013-IT(Inv.V)/108 dt. 23.12.2014 are adhered to. 

(ii) Monitoring the action in the cases of mandatory processing for prosecution generated by the CPC-TDS on a monthly basis. 

(iii) Guiding AO(TDS) to shortlist the cases for processing of prosecution on the basis of list-B and identified on the basis information received from external sources such as spot verification/survey and monitoring action thereon. 

(iv) Maintaining a register in Form-D or in online utility as and when made available in TRACES wherein record of all cases identified for prosecution should be kept. 

(v) Processing all the proposal received by him and if he is of the opinion that the case is prima facie fit for prosecution, issue show cause notices to the accused(s) u/s 276B/276BB r.w.s. 278B or 278C as to why sanction for launching of prosecution should not be accorded. 

(vi) Seeking opinion of the Prosecution or Standing Counsel, as the case may be, about suitability of the case for launching of prosecution and as well as strength of the case against accused(s). Ensuring that the opinion is obtained from the Counsel within 30 days. 

(vii) Examining the opinion of the Standing Counsel and on satisfaction that it is a fit case for prosecution, passing speaking orders u/s 279(1) in the case of accused(s) for each assessment year separately. In case he is not satisfied, he shall drop the proceedings. 

(viii) Completing the process and passing an order u/s 279 sanctioning prosecution or dropping the show cause notice within 60 days of receipt of the proposal. 

(ix) Making an entry for the following events in the manual register or in the utility created in TRACES: 

a. On receipt of proposal from the AO(TDS). 

b. On issue of show cause notice to the accused / co-accused. 

c. On passing of sanction order u/s 279(1) or on dropping of the proceedings as the case may be. 

d. On receipt of compounding application / report on the compounding application. 

e. On filing of complaint / launching of prosecution before the competent court. 

f. On receipt of order of competent Court 

g. On appeal, if any appeal is filed. 

III. Role of Addl.CIT(TDS)

(i) Discussing cases of list-B generated by CPC-TDS and list prepared on the basis of information received from external sources such as spot verification/survey with AO(TDS) and also guiding them in short listing the cases fit for prosecution. 

(ii) Monitoring timely action in all the cases involving mandatory processing for prosecution or cases identified otherwise and to report the progress to the CIT (TDS) in the monthly DO. 

IV. Role of AO(TDS)

(i) Downloading list of cases identified by CPC-TDS for mandatory proceeding of cases (list-A). 

(ii) Downloading list-B of cases for identification of cases based on facts and circumstances of the cases and also to examine cases on the basis of information gathered from external sources such as spot verification / surveys and shortlist cases fit for prosecution amongst these cases after discussion with Range Head and CIT(TDS). 

(iii) Initiating action and collecting information in accordance with the procedures laid down above.

(iv) Issuing show cause notice to all the accused(s) identified by him giving due opportunity to the accused within 45 days of receipt of the list of prosecutable cases from CPC-TDS. 

(v) Sending the proposal prepared in Form ‘F’ alongwith other information / documents to the CIT(TDS) through proper channel. 

(vi) Making an entry for the following events in the manual register or as and when in the utility made available in TRACES: 

a. Initiation of proceedings for prosecution. 

b. Sending the proposal to the CIT(TDS) for necessary action. 

c. Date of receipt of sanction u/s 279(1) of CIT(TDS). 

d. Filing of complaint / launching of prosecution in the competent court on receiving order u/s 279(1). 

e. In case report on the compounding application is to be sent on filing of compounding application by the deductor, date of the report as well as when order on such application is received from the competent authority. 

f. On receiving orders of the competent Court in the case, date of filing of appeal, if any filed. 

V. Role of CIT(CPC-TDS), Ghaziabad:

(i) Generating list-A of defaulters along with their statement of defaults for mandatory processing of cases for prosecution involving delayed payment of Rs. 1 lakhs or more as prescribed in the present Instruction and make it available to AO(TDS) as well as the CIT(TDS) within one month of the filing of the quarterly TDS statement. 

(ii) Generating list-B of cases involving defaults of delay in payment of Rs. 25,000/- to 1,00,000/- alongwith default sheets for the year as well as proceeding year and subsequent year (if dates are available), to help CIT(TDS) AO(TDS) to identify cases fit for prosecution based on facts & circumstances of the cases within one month of the filing of the quarterly TDS statement. 

(iii) Generating a list of non-filers of TDS statement within one month of the due date and communicating to the AO(TDS) with a copy to the CIT(TDS). 

(iv) Developing and maintaining a specific module/utility in TRACES for identification and control over prosecution proceedings where all the details of each case of prosecution can be maintained online.

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Source: http://irsofficersonline.gov.in/Documents/OfficalCommunique/122201555913.pdf