NEW DELHI: The Central Board of Direct Taxes (CBDT) has said that the Mumbai Income-Tax TDS Office Issued Prosecution show cause notices only in some big cases where more than Rs 5 lakh was collected as tax deducted at source (TDS) from employees, but not deposited with the I-T department in time.

CBDT said that some defaulter companies and vested interests were misleading to thwart action against themselves.

Having deducted tax from employees and other taxpayers and not depositing it in time in the government treasury is an offence punishable under law, the CBDT said, adding that it also affects the interest of the employees from whose salary the tax was deducted by unscrupulous employers but wasn’t deposited in the government coffers.

“If the TDS is not deposited in time, the employee would be ineligible for claiming credit of the tax deducted when he files his own return,” a CBDT statement issued late Sunday evening said.

The tax regulator said in the last one month, the Mumbai IT Tds Office Issued prosecution notices in only 50 big cases. In 80% of these cases, the tax default is above Rs 10 lakh and in 10% cases the default is Rs 5-10 lakh. In the remaining 10% cases, the default is above Rs 1 crore as detected in the survey, it said.

Prosecution has also recently been launched against four big business houses where more than Rs 50 crore tax was collected from the taxpayers and yet not deposited with the government in time, it 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,” the CBDT statement said.

“It would be pertinent to note that in a country of 130 crore people, where around 6 crore returns are filed every year, only a total of 1,400 prosecutions have been filed so far for various offences under the Income Tax Act during this financial year,” it said.

This could not be termed as mass harassment by the income tax department. Therefore, to say that prosecution notices have been sent enmasse to taxpayers for minor defaults is completely incorrect and misleading, CBDT said.

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