CENTRALIZED PROCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE SCHEME, 2013

[Mr. M. GOVINDARAJAN]

Section 200 of the Income Tax Act, 1961 (‘Act’ for short) imposes the duty of person deducting tax. It provides-

• Any person deducting any sum in accordance with ²[the foregoing provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs.
• Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs.
• Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed] and deliver or cause to be delivered to the prescribed income-tax authority or the person authorized by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.

 Section 200A was inserted in the Act, 1961 vide Finance (No.2) Act, 2009 with effect from 1.4.2010. The said deals with the processing of statements of tax deducted at source. The said section reads as follows:

200A. (1) Where a statement of tax deduction at source has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:—

     (a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:—

          (i) any arithmetical error in the statement; or

          (ii) an incorrect claim, apparent from any information in the statement;

     (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement;

     (c) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest;

     (d) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (c); and

     (e) the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor:

     Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed.

Explanation.—For the purposes of this sub-section, "an incorrect claim apparent from any information in the statement" shall mean a claim, on the basis of an entry, in the statement—

          (i) of an item, which is inconsistent with another entry of the same or some other item in such statement;

          (ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act.

(2) For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralized processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section.

In exercise of the powers conferred by Section 200A (2) of the Act,  the Central Board of Direct Taxes hereby makes the scheme known as ‘Centralized Processing of Statements of Tax Deducted at Source Scheme, 2013,’ which came into effect from 15.01.2013. For this purpose the Board is given power to set up as many Centralized Processing Cells as it may deem necessary and specify their respective jurisdiction. The Board may in the coming days appoint such cells for the purpose of this scheme.

A deductor shall furnish the correction statement of tax deducted at source in the form specified by the Director General-

           (a) at the authorized agency through electronic mode; or

           (b) Online through the portal.

under digital signature or verified through a process in accordance with the procedure, formats, and standards specified by the Director General.  The terms ‘correction  statement of tax deducted at source’ is defined as the statement furnished for rectifying any mistake or to add, delete or update the information furnished in the statement of tax deducted at source furnished under Section 200(3) of the Act.

The Cell shall process the statement of tax deducted at source furnished by a deductor in the manner specified  after taking into account the information contained in the correction statement of tax deducted at source, if any, furnished by the deductor before the date of processing. The Commissioner may adopt appropriate procedure for processing of the statement of tax deducted at source or decide the order of priority for processing of the statement of tax deducted at source based on administrative requirements.

An Income-tax authority of the Cell may, with a view to rectifying any mistake apparent from the record under Section 154 of the Act, on its own motion or on receiving an application from the deductor, amend any order or intimation passed or sent by it under the Act. An application for rectification shall be furnished in the form and manner specified by the Director General. Where a rectification has the effect of reducing the refund or increasing the liability of the deductor, an intimation to this effect shall be sent to the deductor electronically by the Cell and the reply of the deductor shall be furnished in the form and manner specified by the Director General.  Where an amendment has the effect of reducing a refund already made or increasing the liability of the deductor, the order under Section 154 of the Act passed by an Income-tax authority of the Cell shall be deemed to be a notice of demand under Section 156 of the Act. taxmanagementindia.com

Where a refund arises from the processing of a statement under this scheme, the provisions of Section 154 of the Act shall, so far as may be, apply.

Where a statement of tax deducted at source is processed at the Cell, the appeal proceedings relating to the processing of the statement shall lie with the Commissioner of Income-tax (Appeals) having jurisdiction over the Assessing Officer who has jurisdiction over the deductor and any reference to Commissioner of Income-tax (Appeals) in any communication from the Cell shall mean such jurisdictional Commissioner of Income-tax (Appeals).   The Assessing Officer who has jurisdiction over the deductor shall submit the remand report and any other report to be furnished before the Commissioner of Income-tax (Appeals) and an order, if any, giving effect to appellate order shall be passed by such Assessing Officer.

No person shall be required to appear personally or through authorized representative before the authorities at the Cell in connection with any proceedings. The Cell may call for such clarification, evidence or document as may be required for the purposes of the processing of statement of tax deducted at source or for the purposes of the rectification of any order or intimation passed or sent by the Cell under the provisions of the Act. The deductor shall furnish the reply to any communication under sub paragraph (2) in such format as may be specified by the Director General.

The service of a notice or order or intimation or any other communication by the Cell may be made by delivering or transmitting a copy thereof to the deductor,-

           (a)  by electronic mail; or

           (b)  by placing such copy in the registered electronic account of the deductor on the portal of the Cell; or

           (c) by any mode mentioned in Section 2(1) of the Act/.

The date of posting of any communication above in the electronic mail or electronic account of the deductor in the portal of the Cell shall be deemed to be the date of service of such communication.   The intimation, orders and notices shall be computer generated and need not carry physical signature of the person issuing it.

The Director General may specify procedures and processes, from time to time, for effective functioning of the Cell in an automated and mechanised environment, including specifying the procedure, formats, standards and processes in respect of the following matters, namely:-

           (a) form of correction statement of tax deducted at source;

           (b) the manner of verification of correction statement of tax deducted at source;

           (c) receipt of correction statement of tax deducted at source;

           (d) form of rectification application;

           (e) the manner of verification of rectification application;

           (f) receipt and processing of rectification applications in the Cell;

           (g) the mode and format of the acknowledgement to be issued by the Cell for the receipt of any document;

           (h) the mode of authentication of any document or information submitted to the Cell, including authentication by digital signature or electronic signature;

           (i) validation of any software used for electronic filing of correction statement of tax deducted at source or rectification application;

           (j) provision of web portal facility including login facility, tracking status of correction statement of tax deducted at source or statement of tax deducted at source, display of relevant details of tax deduction or refunds to the taxpayer or deductor, as the case may be, and facility of download of relevant information;

           (k) call centre to answer queries and provide taxpayer services, including outbound calls to a deductor requesting for clarification to facilitate the processing of the statement of tax deducted at source filed;

           (l) provision of grievance redressal mechanism in the Cell;

           (m)  managing tax administration functions such as receipt, scanning, data entry, processing, storage and retrieval of statement of tax deducted at source and documents in a centralized manner or receipt of paper documents through authorized intermediaries.

The Scheme is a step to give effect to the directions of the Delhi High Court in ‘Court on its own Motion V. Commissioner of Income Tax’ where the numerous hardships faced by the assessees were noticed.