Introduction:
In past few years it has been observed that the list of top deductors is fluctuating very frequently in each CsIT (TDS) charge. This is mainly due to sudden break in depositing TDS or by paying very less TDS by many top deductors in relevant financial years. The downfall in TDS deduction of top deductors of the region needs to be monitored. The analysis of the downfall in TDS deduction should consider quantum of deduction, nature of the payment and reason for downfall.

Work relating to identifying top deductors paying less/no tax with respect to previous financial years:

1) Generating a list of top deductors on the system through TRACES, for the last three financial years.

2) Ascertaining reasons for lower tax deduction or collection, based on the type of industry/business.

3) Issuing letters to the deductor to ascertain the reason for negative growth and thereafter taking corrective measures such as spot verifications or referring the matter for prosecution in the case to the CIT (TDS), if the tax so deducted/collected is being utilized by the TAN holder for business.

4) In case of listed companies whose financial results are available in public domain, if there is fall in TDS as compared to earlier year but financial results show business growth, the case must be picked up for survey/spot verification.

5) Survey/spot verification may also be resorted to in case of deductors showing negative growth.

Standard Operating Procedure (SOP) defining the roles of different TDS Authorities in addressing the issue of top deductors paying less/no tax with respect to previous financial years

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

(i) Interacting with the CIT(TDS) on a regular basis monitoring the fluctuation in the TDS/TCS collection.

(ii) Apprising the Zonal Member/Member(R) of the fluctuations and reasons thereof alongwith Action Taken or proposed through monthly D.O. by 10th of the following month and a copy of the D.O. shall also be sent to Principal DGIT(Admn.)

(II) Role of CIT (TDS):

(i) Discussing top cases with substantial fall compared to previous years with the Range Head.

(ii) Analysing the reasons for fall in the TDS/TCS collection in the top cases and also examining the same section-wise.

(iii) Suggesting follow-up action like spot verification/survey etc.

(iv) Incorporating the action taken, in monthly DO.

(III) Role of Addl. CIT(TDS):

(i) Examining the cases with substantial fall compared to previous years and also suggesting action on potential cases.

(ii) Analysing the overall reasons for lower deduction or collection and also TDS/TCS section-wise analysis of negative trend.

(iii)Taking follow-up action like spot verification/survey etc.

(iv) Incorporating the action taken in monthly DO.

(IV) Role of AO – TDS:

(i) Issuing letters to all TAN holders with substantial fall compared to previous years.

(ii) Asking the Inspector to follow up these cases.

(iii)Examining the negative trend in TDS/TCS collection section-wise.

(iv) Getting market information about business prospects of the TAN holder.

(v) Discussing all such cases with the Range head and also suggest corrective measures, if necessary.

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

(i) Providing list of top deductors with three years comparative chart including nature of the payment to each AO – TDS and such report should be generated on real time data.

(ii) Providing copy of such information to jurisdictional Pr. CCIT/CCIT(TDS) as well.

(iii)Analysing and updating sector-wise TDS growth in the other CCIT charges.