Prosecution for failure to pay TCS [Section 276BB]
- Nature of Default
Prosecution applies when a person collects tax under section 206C but fails to deposit it wholly or partly to the Central Government.
However, no prosecution shall be initiated if the TCS amount is deposited on or before the due date of filing the TCS statement. If the Government extends such due date, the extended date shall be considered for calculating the limitation for prosecution immunity.
- Exception
As per CBDT Circular No. 24/2019, dated 09.09.2019, prosecution shall not be initiated where:
o The defaulted TCS amount is Rs. 25 lakh or less, and
o The delay in deposit is less than 60 days.
In exceptional cases like habitual defaults, prosecution may be initiated with prior approval of a collegium of two officers of CCIT/DGIT rank.
- Period of Imprisonment
Punishable with rigorous imprisonment for a term ranging from 3 months to 7 years and fine.
- Prosecution for Subsequent Offences
On second and subsequent convictions, punishment shall be rigorous imprisonment for 6 months to 7 years and fine.
- Penalty for failure to collect tax
Failure to collect TCS under Section 206C attracts penalty under Section 271CA.
- Relaxation from Prosecution
Immunity from prosecution may be granted by the Principal Commissioner/Commissioner, but it will be withdrawn if the assessee fails to meet the required conditions and according to CBDT guidelines, the offence under this provision is compoundable.