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Trusted TDS Notice Reply Consultants · Tharamani (PIN 600113)

Tharamani TDS Notice Reply — Chennai South

End-to-end TDS Notice Reply for Tharamani it corridor anchor with research institutions establishments — backed by a 15+ year track record

TDS Notice Reply for it services businesses in Tharamani near IIT Madras Research Park — fixed fee, deterministic turnaround and archived working papers. Call 9566-068-468.

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Quick Answer

What documents does the C.A. need to issue Form 26A Annexure A in Tharamani, Chennai?

The C.A. must verify and retain: (i) deductee's PAN copy; (ii) deductee's ITR-V / ITR acknowledgement for the relevant AY; (iii) deductee's computation of total income showing the gross amount included as income; (iv) deductee's tax payment proof (challan / Form 26AS); (v) C.A.'s working papers reconciling the deductor's payment with deductee's income; (vi) management representation letter from deductor confirming amount paid and TDS not deducted. Annexure A in Form 26A is signed only after this verification.

Transparent Pricing

TDS Notice Reply in Tharamani — Plans & Pricing

Fixed fees · Zero hidden charges · Call 9566-068-468 for a custom quote.

MonthlyAnnualSave 2 Months
Basic Reply
Section 200A intimation reply
₹2,500/per notice

  • Section 200A Intimation Analysis
  • TRACES Justification Report Download
  • Default Head-Wise Mapping (Short Payment / Short Deduction / Interest / 234E)
  • Online Correction (C-1 Challan / C-2 Add Challan / C-9 PAN Correction) — 1 Quarter
  • Default Rectification Request (DRR) on TRACES
  • 30-Day Recovery Window Tracking under Section 220
  • Section 234E Pre-01-Jun-2015 Fee Challenge
  • Section 201(1A) Interest Recomputation
  • Form 26A Annexure-A Preparation
  • Section 201 Default Defence
  • Section 40(a)(ia) Disallowance Defence
  • CIT(A) Section 250 Appeal
  • Notice Type: Section 200A CPC-TDS Intimation
  • Quarter Coverage: Single Quarter (One Form 24Q/26Q/27Q/27EQ)
  • Deductee Rows: Up to 25
  • WhatsApp Acknowledgement of Filing
  • Senior Consultant Lead
Starter
234E challenge + 201(1A) interest recompute
₹5,500/per notice

  • Section 200A Intimation Analysis
  • TRACES Justification Report Download
  • Default Head-Wise Mapping
  • Online Correction (All Categories C-1 to C-9) — Up to 4 Quarters
  • Default Rectification Request (DRR) on TRACES
  • Section 234E Pre-01-Jun-2015 Fee Challenge — Fatehraj Singhvi (Kar HC) Citation
  • Section 201(1A) Interest Recomputation Period-Wise (1% + 1.5%)
  • Part-Month Interest Audit
  • Challan Correction OLTAS — Coordination with Bank / AO TDS
  • BIN Matching for Government Deductors
  • Form 26A Annexure-A Preparation
  • Section 201 Default Defence
  • Section 40(a)(ia) Disallowance Defence
  • CIT(A) Section 250 Appeal
  • Notice Type: Section 200A + 234E Demand
  • Quarter Coverage: Up to 4 Quarters / 1 Financial Year
  • Deductee Rows: Up to 100
  • WhatsApp + Email Filing Acknowledgements
  • Section 271H ₹10K-₹1L Penalty Defence
  • Senior Consultant Lead
Most Popular ⭐
Professional
Form 26A + Section 201 default defence
₹12,000/per notice

  • Section 200A Intimation Full Analysis
  • TRACES Justification Report — Deductee-Wise Defence Mapping
  • Online Correction All Categories — Unlimited Quarters in 1 FY
  • Default Rectification Request (DRR)
  • Section 234E Fatehraj Singhvi Challenge
  • Section 201(1A) Interest Recomputation with Form 26A Truncation
  • Form 26A Annexure-A Preparation through Practicing C.A.
  • Online Filing of Form 26A on TRACES (Deductor + C.A. Login)
  • Form 26B Refund Request for Over-paid TDS
  • Section 201(1) Deemed Default Defence — First Proviso Hindustan Coca-Cola
  • Section 271C Failure-to-Deduct Penalty Defence under Section 273B
  • Section 271H Late Filing Penalty Defence
  • Section 197 Lower Deduction Certificate Application (Form 13)
  • Section 206AB / 206CCA Compliance Check Defence
  • Section 206AA PAN-less Higher Rate Defence
  • Challan + BIN Reconciliation
  • Section 40(a)(ia) Disallowance Defence in Income-Tax Assessment
  • CIT(A) Section 250 Appeal
  • Notice Type: 200A + 201(1) + 201(1A) + 234E + 271H
  • Quarter Coverage: All Open Quarters (24Q/26Q/27Q/27EQ)
  • Deductee Rows: Unlimited
  • WhatsApp + Email + Call Updates
  • 30/45-Day Demand Tracking under Section 220(2)
  • Senior Consultant Lead — C.A. with 15+ Years TDS Practice
Premium
40(a)(ia) disallowance defence + Section 250 appeal
₹35,000/per notice

  • All Professional Plan Inclusions
  • Section 40(a)(ia) 30% Disallowance Defence in Section 143(3) Assessment
  • Section 40(a)(i) 100% Disallowance Defence (Foreign Payee)
  • Form 26A Second Proviso Defence — No 40(a)(ia) Disallowance
  • Section 195 Chargeability Defence — Engineering Analysis (SC 2021)
  • DTAA Article 12 Royalty / FTS ""Make Available"" Defence
  • Section 90(2) Treaty Override on Section 206AA
  • TRC + Form 10F + No-PE Declaration Compilation
  • Section 201 Order Time-Bar Defence — Section 201(3) 7-Year Limit
  • Section 220(6) Stay of Demand Petition
  • CIT(A) Section 250 Appeal in Form 35 — Faceless Appeal Centre
  • Rule 46A Additional Evidence Petition
  • ITAT Section 253 Appeal in Form 36
  • ITAT Hearing Representation with Counsel Coordination
  • Section 276B Prosecution Compounding under CBDT 17-Oct-2024 Guidelines
  • Vivad se Vishwas 2024 Settlement Application Where Eligible
  • Notice Type: All — 200A / 201 / 201(1A) / 234E / 271C / 271H / 276B / 40(a)(ia) / 40(a)(i)
  • Quarter Coverage: Unlimited Quarters / Multiple Financial Years
  • Deductee Rows: Unlimited
  • Personal Hearing Representation (Video & Physical)
  • WhatsApp + Email + Dedicated Senior Consultant + Counsel
  • High Court Section 260A Filing Support Where Applicable

Swipe to see all plans

Prices exclude GST. For enterprise pricing, call 9566-068-468.

Why FilingPro?

Why Tharamani Clients Choose FilingPro

Expert TDS Notice Reply in Tharamani — qualified professionals, 15+ years experience, zero-penalty track record.

30-Day Section 220 Recovery Window Tracked

Every Section 200A intimation received by Tharamani clients is logged with a 30-day countdown to Section 220(1) recovery. Online Correction or Default Rectification Request is filed at least 5 days before expiry; Section 220(2) interest at 1% per month and Section 221 penalty are pre-empted.

TRACES Justification Report Mapped Line by Line

Justification Report (PDF + CSV) is downloaded on day one and every row — challan, deductee, section, default head — is keyed to the appropriate remedy: Online Correction C-1 to C-9, Default Rectification Request, Form 26A, or substantive reply with case law citation.

Form 26A Annexure-A Filed Through Practicing C.A.

Where the deductee has filed return and paid tax, Form 26A is filed online through TRACES with our partner Chartered Accountant signing Annexure A on DSC. Default head under Section 201(1) drops to NIL; only Section 201(1A) interest survives — saving the deductor full principal.

Section 234E Pre-01-Jun-2015 Fee Quashed

Pre-01-Jun-2015 quarter 234E fees are challenged citing Fatehraj Singhvi & Ors v. UoI [2016] 73 taxmann.com 252 (Kar HC) — Section 200A(1)(c) was inserted only w.e.f. 01-Jun-2015. CPC-TDS / ITAT benches across India follow this ratio. Multi-lakh fee demands wiped out for Tharamani clients.

Section 201(1A) Interest Recomputation

Each interest row in the Justification Report is recomputed manually — date-deductible, date-deducted, date-deposited audited against challans and books. Form 26A truncation up to deductee return-date applied to the 1% leg. Average interest reduction: 35% to 60%.

Section 40(a)(ia) Second Proviso Defence

Once Form 26A is accepted on TRACES, the second proviso to Section 40(a)(ia) is invoked in the deductor's Section 143(3) assessment to defeat the 30% expense disallowance — Form 26A pulls double duty for Tharamani clients.

Key Benefits

What Tharamani Clients Get

Every TDS Notice Reply engagement delivers measurable, guaranteed outcomes — expert professionals, on time, every time.

Section 201 Time-Bar Defence
Section 201 orders against resident deductors beyond 7 years from end of FY of payment are quashed on time-bar — Section 201(3) limit is jurisdictional and cannot be cured by extension.
Refund of Over-paid TDS Recovered
Where TDS was over-paid against subsequently-extinguished default (e.g. Form 26A filed retroactively), refund is claimed in Form 26B on TRACES under Rule 31A(4A) — refund credited to deductor's bank account.
Section 195 Software TDS Defeated
Section 195 short-deduction on software / cloud / SaaS payments to non-residents defeated citing Engineering Analysis (SC 2021) — payment not royalty under DTAA Article 12, no Section 201 default, no Section 40(a)(i) disallowance, no Section 271C penalty.
Default Reduced to NIL on TRACES
Where Form 26A is accepted by NSDL / TRACES, the Section 201(1) deemed-default head is reduced to NIL — full principal saved. Only Section 201(1A) interest survives, often a fraction of the original demand for Tharamani clients.
Section 234E Fee Wiped Out
Pre-01-Jun-2015 quarter Section 234E fees — often running into multi-lakh demands — are wiped out citing Fatehraj Singhvi (Kar HC 2016). The relief is unconditional once the period is established.
Section 201(1A) Interest Reduced 35-60%
Justification Report interest recomputed manually with Form 26A truncation, part-month audit and challan-date verification — typical reduction 35% to 60% of the originally raised 201(1A) demand.
Comparison

Section 200A Intimation vs Section 201 Default Order

Why this matters here — In Tharamani, the cluster of it services, r&d, education businesses that defines Tharamani's commercial fabric; served by short connections to Tidel Park and Kotturpuram and onward to central Chennai.

AspectSection 200A IntimationSection 201 Default Order
Deductee tax credit reliefNot a route for relief — 200A only validates the statement; Section 197 lower-deduction certificates and Section 199 credit issues are handled separatelyForm 26A under proviso to Section 201(1) read with Rule 31ACB — if deductee has filed its return, paid the tax and obtained chartered accountant certificate, deductor is exempted from Section 201 default
Appeal forumRectification under Section 154 to CPC-TDS first; appeal under Section 246A(1)(a) before CIT(A) (NFAC) lies against an intimation that adjudicates Section 234E fee or Section 201(1A) interestAppeal under Section 246A(1)(ha) before CIT(A) (NFAC) within 30 days of order; further appeal to ITAT under Section 253(1)(a) and HC under Section 260A
Stay of demandSection 220(6) stay application before the AO; 20 per cent pre-deposit per CBDT Office Memorandum F.No.404/72/93-ITCC dated 29 Feb 2016 is the working benchmarkStay before the CIT(A) under inherent powers (Asahi India Safety Glass ratio) or before ITAT under Section 254(2A); writ to Madras HC where serious prejudice is shown
Penalty exposureSection 234E late-filing fee operates here; Section 271H penalty for non-filing or inaccurate statement is initiated separately if delay exceeds one year or particulars are wrongPenalty under Section 271C (failure to deduct) at 100 per cent of TDS, under Section 271CA (failure to collect) and prosecution under Section 276B (failure to deposit) — separate proceedings
Reasonable cause defenceSection 273B reasonable-cause defence is generally not available against Section 234E fee — the fee is automatic per Karnataka HC in Fatheraj Singhvi and Madras HC follow-up rulingsSection 273B is a complete defence against Sections 271C and 271CA penalties; bonafide interpretation, certified opinion or vendor's Form 26A operates to negate mens rea
Strategic response postureRapid reconciliation, correction statement (Form 27A) within the 30-day intimation window, Section 154 rectification for system errors; 234E challenge route is largely foreclosedDetailed factual reply to Section 201 show-cause, Form 26A from deductees where possible, written submissions citing GE Technology Centre and Hindustan Coca-Cola; preserve appellate record
Statutory anchorComputer-processed intimation generated by CPC-TDS under Section 200A(1) of the Income Tax Act 1961 after processing the TDS statement filed under Section 200(3)Quasi-judicial order passed by the jurisdictional Assessing Officer (TDS) under Section 201(1) read with Section 201(1A) treating the deductor as an assessee-in-default
TriggerArithmetical errors, incorrect claim apparent from the statement, short payment as per challan-statement match, or late-filing fee under Section 234E surfaced during automated processingFailure to deduct, short deduction, failure to deposit after deduction, or wrong-section deduction noticed by the AO after enquiry under Section 201(1) read with Rule 31A reconciliation
Issuing authorityCentralised Processing Cell-TDS at Vaishali, Ghaziabad, operating as the prescribed authority under the Centralised Processing of Statements Scheme 2013Jurisdictional Assessing Officer (TDS) — for Chennai deductors this is the ITO/ACIT (TDS) wards at Nungambakkam, after issuing a Section 201 show-cause notice with opportunity of hearing
Limitation periodMust be issued within one year from the end of the financial year in which the statement is filed per the proviso to Section 200A(1)Seven years from the end of the financial year in which payment is made or credit is given, per Section 201(3) as substituted by Finance (No. 2) Act 2024 (earlier six years)
Nature of processSummary, computer-driven, non-adversarial; no opportunity of hearing before issue but rectification under Section 154 is availableQuasi-judicial; pre-decisional show-cause and personal hearing mandated by the Madras HC in Tube Investments of India and natural-justice jurisprudence
Liability quantumLate-filing fee under Section 234E at ₹200 per day capped at TDS amount, plus interest under Section 201(1A) for short/late payment surfaced at processingFull TDS shortfall as deductor's primary liability, plus Section 201(1A) interest at 1 per cent per month for non-deduction and 1.5 per cent per month for non-payment
Documents Required

Documents for TDS Notice Reply

Share documents via WhatsApp to 9566-068-468. No office visit required for Tharamani clients.

Section 200A intimation copy / Section 201(1) order / TRACES default summary email with reference number and DIN
TRACES Justification Report (PDF + CSV) downloaded from Defaults > Justification Report Download for the relevant Quarter / FY
Filed TDS statements — Form 24Q (salary) / 26Q (resident non-salary) / 27Q (non-resident) / 27EQ (TCS) — Conso File and Form 27A acknowledgement
Challan-payment proof — CIN / BSR Code / Date of Deposit / Challan Serial No. with bank counterfoil; for govt deductors Form 24G + BIN
Deductee details — PAN, Aadhaar (Section 139AA), TRC + Form 10F for non-residents, vendor Form 16/16A acknowledgement, payee Form ITR-V
Supporting evidence — invoices, contracts, 194I rent agreements, 194C work orders, 194J professional engagement letters, Section 197 lower-deduction certificates, Section 206AB Compliance Check screenshots
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Statutory Deadlines

Compliance deadlines that matter

Miss any of these and the next consequence kicks in automatically.

Deadlines in this neighbourhood — In Tharamani, the business activity radiating outward from IIT Madras Research Park and nearby commercial pockets.

Trigger eventDaysFormConsequence
Service of Section 200A intimation by CPC-TDS30 daysOnline response on TRACESSection 220(2) interest at one per cent per month accrues from day thirty-one onward
Service of Section 201(1) order treating deductor as assessee in default30 daysForm 35 first appealRight of first appeal under Section 246A lapses subject to delay condonation
Filing of corrected TDS statement to extinguish short-deduction default365 daysConso File correction through TRACESSection 271H(3) immunity window closes on completion of one year from due date
Outer limit for passing Section 201(1) order2555 daysNot applicableLimitation under Section 201(3) bars passing of order beyond seven financial years
Receipt of Section 200A intimation by email or post30 daysOnline Correction / DRR on TRACESDemand becomes recoverable under Section 220(1) with Section 220(2) interest at 1% per month and Section 221 penalty risk
Receipt of Section 201(1) deemed-default order by email30 daysForm 35 CIT(A) appeal / Section 220(6) stay applicationSection 220(2) interest at 1% per month accrues; PAN-level recovery tag activates on TRACES blocking refunds
Section 234E late-fee crystallisation on Section 200(3) due-date breachOn due dateForm 26Q / 24Q / 27Q / 27EQ — file immediately on defaultFee accrues at ₹200/day from the due-date until statement filed; capped at TDS amount; Section 271H penalty notice within 12 months
Filing Section 220(6) stay application pending first appeal30 daysStay application to Assessing OfficerTwenty per cent pre-deposit norm under Instruction 1914 applies absent stay

Deadline pressure points we see in Tharamani: Where Tharamani differs: for Tharamani IT-services firms managing export-LUT cycles alongside payroll and TDS.

Forms Library

Forms used in this engagement

Conso FileConsolidated TDS statement file from TRACES

Downloaded by the deductor from TRACES, used as the source dataset for preparing online or offline corrections to an earlier-filed quarterly statement.

Used as required for correction filings Downloaded from TRACES; corrected file uploaded to TIN-FC
Justification ReportDefault justification report from TRACES

Auto-generated PDF and CSV report listing default heads — short payment, short deduction, late deduction, late payment, interest and fee — against a processed quarterly statement.

Available within seven to ten days of intimation issue Generated by CPC-TDS Ghaziabad on TRACES
Form 26ACertificate from accountant under first proviso to Section 201(1)

Certifies that the deductee has filed return, included the receipt and paid the tax, thereby extinguishing the deductor's deemed-default exposure.

May be filed at any time before the order under Section 201(1) is passed Filed electronically through TRACES portal to jurisdictional Assessing Officer (TDS)
Form 24QQuarterly statement of TDS on salaries

Carries deductee-wise particulars of tax deducted from salary payments under Section 192, with Annexure II in the fourth quarter for salary computation.

Within thirty-one days of the end of the relevant quarter Filed electronically through TIN-FC or NSDL to CPC-TDS Ghaziabad
Form 26QQuarterly statement of TDS on non-salary domestic payments

Carries deductee-wise particulars of tax deducted on payments to residents other than salaries — Sections 194 to 194T as applicable.

Within thirty-one days of the end of the relevant quarter Filed electronically through TIN-FC or NSDL to CPC-TDS Ghaziabad
Form 27QQuarterly statement of TDS on payments to non-residents

Carries deductee-wise particulars of tax deducted on payments to non-residents under Section 195, with country code, residential status and DTAA rate fields.

Within thirty-one days of the end of the relevant quarter Filed electronically through TIN-FC or NSDL to CPC-TDS Ghaziabad
Form 27EQQuarterly statement of tax collected at source

Carries collectee-wise particulars of tax collected under Section 206C, covering scrap, timber, motor vehicles, foreign remittance and overseas tour package items.

Within thirty-one days of the end of the relevant quarter Filed electronically to CPC-TDS Ghaziabad through TIN-FC or NSDL
Form 16Certificate of tax deducted at source from salary

Issued to salaried employees evidencing tax deducted under Section 192, carrying Part A from TRACES and Part B with detailed salary computation.

By the fifteenth day of June of the financial year immediately following the year of deduction Issued by the deductor-employer to the employee

TDS Notice Reply in Tharamani, Chennai 600113

Because PIN 600113 sits inside the Chennai South jurisdiction, the handling office for Tharamani stays consistent across years, which matters when filings or approvals span cycles. Businesses registered in Tharamani share the Chennai South jurisdiction, and their statutory matters route through the same Velachery Division each time. Statutory correspondence for Tharamani businesses routes through the Velachery Division, so we align every TDS Notice Reply engagement to that jurisdiction from the start. For TDS Notice Reply at PIN 600113, understanding the Velachery Division's documentation norms removes most of the friction from the process.

Tharamani reads as a it corridor anchor with research institutions pocket with high commercial activity, anchored around IIT Madras Research Park and fed by the Tharamani Bus Stop corridor. Commercial activity in Tharamani runs high, so TDS Notice Reply volumes scale through peak months and we staff the Tharamani desk accordingly. Vendors and customers tied to the Tharamani Bus Stop network show up across the invoice trail we reconcile for Tharamani TDS Notice Reply clients. The businesses clustered around IIT Madras Research Park in Tharamani drive the bulk of the TDS Notice Reply workload we see each cycle.

We have closed enough TDS Notice Reply files for education firms near Tharamani to know where the department usually probes. The education character of Tharamani commerce influences everything from invoice formats to the supporting documents a TDS Notice Reply review needs. The education firms we serve in Tharamani value a TDS Notice Reply partner who already understands their sector's compliance rhythm. A education operator in Tharamani gets a TDS Notice Reply workflow shaped by sector norms, not a one-size-fits-all template.

The Tharamani TDS Notice Reply workflow is documented end-to-end: WhatsApp document intake, a working file, qualified review, and a filed acknowledgement back to you. Every TDS Notice Reply file we open for Tharamani is reconciled, reviewed by a qualified practitioner, and archived for seven years. Working papers for Tharamani TDS Notice Reply engagements stay archived and retrievable, which makes any later notice or query straightforward to answer. From the first TDS Notice Reply cycle, a Tharamani engagement is set up to be audit-ready rather than reconstructed under pressure later.

Coverage from Tharamani naturally extends to Kotturpuram, so group entities across the area share one TDS Notice Reply workflow. Businesses straddling Tharamani and Kotturpuram get a single TDS Notice Reply point of contact rather than two. Proximity to Kotturpuram means a Tharamani engagement can extend across the locality cluster with no change in cadence. A client relocating between Tharamani and Kotturpuram keeps the same TDS Notice Reply file and the same team.

The longer we serve Tharamani, the more precisely we predict where a TDS Notice Reply file needs attention. Sector signals in Tharamani — seasonal r&d swings and peak-period volumes — shape how we schedule TDS Notice Reply work. Each engagement in Tharamani adds to a record of what the Chennai South jurisdiction expects, sharpening the next TDS Notice Reply file. Because we work repeatedly across Tharamani, we can benchmark a new client's TDS Notice Reply position against the locality norm.

Relocating a registered office into Tharamani (PIN 600113) changes the assessing division, and we handle that TDS Notice Reply transition cleanly. We onboard new Tharamani entities onto a TDS Notice Reply cadence that is audit-ready from the very first cycle. New education ventures in Tharamani lean on us to stand up TDS Notice Reply correctly before the first deadline rather than after a notice. A startup setting up near CSIR-CLRI in Tharamani gets a TDS Notice Reply foundation built for the Velachery Division from day one.

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Expert Guide

TDS Notice Reply in Tharamani — Complete Guide

Section 201(1A) interest in the Justification Report is computed mechanically — 1% per month from date deductible to date deducted, plus 1.5% per month from date deducted to date deposited, with any part-month treated as a full month. Where Form 26A is filed, the 1% interest period is truncated up to the deductee's return-filing date — saving 1% per month for the post-return period. For Tharamani clients we manually audit each row, identify part-month over-counting, and refile. Average interest reduction in our practice: 35% to 60% of the originally raised demand.

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Key Facts — TDS Notice Reply in Tharamani
Section 200A intimation reply with line-by-line Justification Report mapping — short payment, short deduction, 201(1A) interest and 234E fee defended on facts
Online Correction filed on TRACES across all categories C-1 through C-9 — challan tagging, PAN correction, deductee row movement, salary detail correction in 24Q Annexure II
Section 234E ₹200 per day late fee challenged on Fatehraj Singhvi (Karnataka HC 2016) for pre-01-Jun-2015 quarters; period-wise computation audited for post-01-Jun-2015 levies
Section 201(1) deemed-default order defended through Form 26A Annexure-A under first proviso — Hindustan Coca-Cola SC 2007 codified relief; default head reduced to NIL on TRACES
Section 201(1A) interest recomputed manually with Form 26A truncation up to deductee return-filing date — saves 1% per month for the post-return period
Section 40(a)(ia) 30% expense disallowance in Section 143(3) assessment defended through second proviso — Form 26A relief extends to business-income computation
Section 195 / 206AA / 90(2) defence for non-resident TDS — DTAA Article 12 "make available" test, Engineering Analysis (SC 2021) for software, TRC + Form 10F + No-PE declaration
Section 271H ₹10K-₹1L penalty for late / incorrect TDS return defended under Section 271H(3) immunity and Section 273B reasonable cause — Eli Lilly SC 2009 doctrine
Section 276B prosecution for non-deposit of TDS — compounding application under CBDT Guidelines dated 17-Oct-2024 with full payment of TDS + 1.5% interest
CIT(A) Section 250 appeal in Form 35 against Section 201 / 271C orders, Section 220(6) stay of demand, ITAT Section 253 representation — Vivad se Vishwas 2024 evaluated
People Also Ask — TDS Notice Reply in Tharamani
What is the time limit to reply to a Section 200A intimation?
No separate reply window — but the demand becomes recoverable under Section 220(1) after 30 days of service. Online Correction or Default Rectification Request must be filed within 30 days to avoid recovery, interest under Section 220(2) at 1% per month and penalty under Section 221.
How do I download the TRACES Justification Report?
Login to www.tdscpc.gov.in as Deductor > Defaults > Justification Report Download > select FY, Quarter and Form Type > submit request > download from Requested Downloads after 24 hours. Both PDF (summary) and CSV (deductee-wise) versions are available — both are required for a complete defence.
Does Form 26A wipe out the entire TDS demand?
Form 26A wipes out the principal short-deduction default under Section 201(1) but interest under Section 201(1A)(i) at 1% per month from the date the tax was deductible up to the date the deductee filed his return is still payable by the deductor. The 1.5% interest under 201(1A)(ii) is irrelevant since no deduction occurred.
Can Section 234E fee be challenged for periods before 01-Jun-2015?
Yes — the Karnataka High Court in Fatehraj Singhvi & Ors v. UoI [2016] 73 taxmann.com 252 held that Section 200A(1)(c) authorising 234E adjustment was inserted only w.e.f. 01-Jun-2015 by Finance Act 2015; pre-amendment 234E levies through Section 200A intimation are ultra vires. Multiple ITAT benches (Mumbai, Pune, Chennai) follow this ratio.
What is the difference between Online Correction and Default Rectification Request?
Online Correction (TRACES > Defaults > Request for Correction) is filed by the deductor to amend the TDS statement — challan tagging, PAN correction, deductee row movement, etc. — across categories C-1 to C-9. Default Rectification Request (DRR) is raised against an erroneous default flagged by CPC-TDS where the underlying statement is correct (e.g. challan paid but not visible due to BIN / OLTAS issue).
What is the limitation period for a Section 201 order?
Section 201(3) (substituted by Finance (No. 2) Act 2014) prescribes 7 years from the end of the FY in which payment is made / credit is given for resident payees. For non-resident payees there is no statutory time-limit; courts have read in a reasonable period (Vodafone Idea / Mahindra Holidays line). Time-barred 201 orders are quashable in writ.
What is the Goetze v CIT principle relevant to TDS replies?

The Supreme Court in Goetze (India) v CIT held that fresh claims cannot be made before the AO except by a revised return. In TDS replies, this means deductee tax-credit corrections must flow through correction statements, not by mere AO submissions.

How does Section 226(3) garnishee attachment work for TDS demand?

Section 226(3) allows the AO to issue notice to debtors (banks, customers) of the deductor requiring them to pay the deductor's debts directly to the department. File Section 220(6) stay application immediately to halt the attachment; writ to Madras HC for release.

What documents should I file with a Section 201 reply?

Show-cause reply, deductee Form 26A certificates, contracts/agreements clarifying the nature of payment, prior assessment orders for the same payment-type, CA opinion (if relied on), TDS challans, statement of facts, and a tabulated submission of Section 273B reasonable-cause grounds.

Can a Section 200A intimation create a new tax demand?

Yes, indirectly. Section 200A processing may surface short-payment, mismatch, Section 234E fee, and Section 201(1A) interest demands, which crystallise via Section 156 follow-up demand notice. The substantive Section 201 default itself requires a separate AO order.

What is the role of TRACES in TDS notice management?

TRACES is the deductor-side portal for filing statements, viewing defaults, downloading consolidated files for corrections, generating Form 16/16A, registering grievances, and tracking refunds. CPC-TDS at Vaishali, Ghaziabad operates the back-end processing per the Centralised Processing of Statements Scheme 2013.

How do I challenge a Section 271C penalty in Chennai?

File a reply to the show-cause invoking Section 273B reasonable-cause defence with documentary support; if penalty is levied, appeal under Section 246A(1)(q) before CIT(A) (NFAC); further appeal to ITAT Chennai bench; engage a Chennai TDS-specialist lawyer for higher courts.

What Tharamani clients want to know before signing: Where Tharamani differs: around the IIT Madras Research Park catchment of Tharamani.

Expert Guide

A complete walkthrough — Tds Notice Reply

Reading this guide locally — In Tharamani, around the IIT Madras Research Park catchment of Tharamani.

What is a TDS notice and the architecture of TDS enforcement

Conceptual origin of TDS as pay-as-you-earn

The Tax Deduction at Source mechanism in India under Chapter XVII-B of the Income Tax Act 1961 implements what the OECD framework calls a pay-as-you-earn collection design. It is to be noted that the policy goal traces to the Direct Taxes Enquiry Committee 1971 (Wanchoo Committee) recommendation that revenue collection be advanced to the point of accrual rather than the point of assessment, reducing tax arrears and broadening the information base. The Comptroller and Auditor General's 2017 performance audit on TDS administration observed that approximately 36% of direct-tax revenue is now collected at source, against an OECD-area average of roughly 60% for income subject to withholding. A TDS notice therefore performs a dual function — it is both a revenue-recovery instrument addressed to the deductor as the assessee-in-default under Section 201, and an information-correction instrument under Section 200A reconciling the deductor return with deductee credit claims in Form 26AS.

Five categories of TDS communications

TDS communications received by Chennai deductors broadly fall into five categories distinguishable by their statutory anchor. First, Section 200A(1) intimations are issued by the Centralised Processing Cell-TDS at Vaishali Ghaziabad on prima-facie defaults identified during return-processing. Second, Section 201(1) default orders are issued by jurisdictional Assessing Officer (TDS) on substantive non-deduction or short-deduction post-enquiry. Third, Section 234E demand notices arise from late-filing fee at ₹200 per day of delay. Fourth, Section 271H penalty notices follow non-filing exceeding one year or false-particulars. Fifth, Section 220 recovery and Section 221 penalty notices follow non-payment beyond 30 days. Each category invokes a distinct response framework, distinct limitation period and distinct appellate route — conflating them is the single most common defence error observed in the Madras ITAT TDS-Bench rulings since 2018.

TRACES portal and the Justification Report

The TDS Reconciliation Analysis and Correction Enabling System (TRACES) is the operational interface through which CPC-TDS communicates with deductors. Sub-rule (2) of Rule 31A of the Income Tax Rules 1962 provides that every default identified during processing is recorded on TRACES with a downloadable Justification Report — a PDF and CSV deliverable that lists row-wise the challan, deductee PAN, section, deduction-amount, default-head and amount-in-default. The Justification Report carries indicative computations only; the binding figures are those in the Section 200A intimation and the consequential demand on the TRACES dashboard. The TRACES architecture follows the OECD Forum on Tax Administration's 2014 design template on digital-by-default tax-payer-services, mirrored in similar withholding-platforms in the United Kingdom (HMRC RTI) and Australia (ATO Single Touch Payroll).

Section 246A first appeal to CIT(A)

Order under Section 250 — scope and limitations

Sub-section (4) of Section 250 empowers the CIT(A) to confirm, reduce, enhance or annul the assessment. The power to enhance is preceded by a notice under sub-section (3) to the assessee — failure to issue such notice vitiates the enhancement. The Supreme Court in CIT v Shapoorji Pallonji Mistry held that the enhancement power does not extend to a new source of income not considered by the AO. The order must be passed within one year from the end of the financial year in which the appeal was filed under Section 250(6A) — though this is directory not mandatory per the Punjab and Haryana HC in CIT v Bhan Singh Boota Singh.

Statutory scope and appealable orders

Sub-section (1) of Section 246A enumerates the orders against which an appeal lies to the Commissioner of Income Tax (Appeals) — for TDS purposes, clauses include order under Section 201 deeming a person to be an assessee-in-default, order imposing penalty under Sections 271, 271A, 271AA, 271B, 271BA, 271C, 271CA, 271D, 271E, 271FB, 271G, 271H, 272A, 272AA, and orders under Section 154 amending any of these. The Section 200A intimation, being a return-processing summary, is appealable under Section 246A(1)(a) treating it as an order under sub-section (1) of Section 143 to the extent of the prima-facie adjustment.

Form 35 and the 30-day limitation

The appeal under Section 246A is filed in Form 35 electronically through the income-tax e-filing portal under Rule 45. The limitation is 30 days from the date of service of the order. Sub-section (5) of Section 249 empowers the Commissioner (Appeals) to admit a delayed appeal where sufficient cause is shown. The Supreme Court in Collector Land Acquisition v Mst Katiji established the liberal-construction principle — sufficient cause should be construed generously where the assessee was not careless. The appeal fee under Section 249(1) ranges from ₹250 (income up to ₹1 lakh) to ₹1,000 (above ₹2 lakh) and is paid through challan ITNS 280.

ITAT Section 253 appeal and beyond

Madras HC and Supreme Court — Section 260A and 261

Sub-section (1) of Section 260A provides an appeal to the High Court from an order of ITAT where a substantial question of law arises. The Madras HC, exercising jurisdiction over Tamil Nadu and Puducherry, is the appellate forum for ITAT Chennai-Bench orders. The limitation is 120 days from the date of receipt of the order. The Supreme Court has further appellate jurisdiction under Section 261 on grant of certificate by the HC or on special leave under Article 136. The Madras HC in CIT v Sundaram Finance Distribution Ltd and CIT v Shriram Capital have set out the substantial-question-of-law threshold in TDS-default contexts.

Stay of demand at ITAT and the Pepsi Foods doctrine

Sub-section (2A) of Section 254 (the operational provision for ITAT proceedings) empowers ITAT to grant a stay of demand for an initial period of 180 days extendable on cause shown. The Supreme Court in Pepsi Foods Ltd v Asst CIT (2021) struck down the third proviso to 254(2A) — which had limited the extension power to 365 days even where the delay was not attributable to the assessee — as arbitrary and violative of Article 14. The current position is that ITAT can extend stay beyond 365 days where the delay is not attributable to the assessee, restoring substantial justice. The stay order must record reasons under 254(2A) first proviso.

Appealable orders before ITAT

Sub-section (1) of Section 253 enumerates the orders against which an appeal lies to the Income Tax Appellate Tribunal — these include orders of the CIT(A) under Section 250, orders of the Principal Commissioner or Commissioner under Section 263 (revision), and orders under Section 154 in certain situations. For TDS-default appeals, the CIT(A)'s order under Section 250 on a Section 201 / 234E / 271H appeal is appealable under 253(1)(a). The Department can file an appeal under 253(2) where the CIT(A) order is adverse to revenue. The cross-objection under 253(4) is available to the respondent within 30 days of receipt of memorandum.

Section 200A intimation framework and its limits

Online Correction versus reply on merits

Sub-section (3) of Section 200A read with Rule 31A(5) provides for the deductor to file a correction statement. The TRACES Online Correction module supports nine correction-types — C-1 personal information, C-2 challan correction, C-3 challan addition, C-4 movement of deductees, C-5 PAN correction, C-6 PAN correction with verification, C-7 add-modify deductee, C-8 challan-deductee re-mapping, and C-9 lower-deduction-certificate update. Where the default is a data-mismatch (challan unmapped, deductee PAN typo, BIN error) the Online Correction route closes the default without merits-engagement. Where the default is substantive — under-rate, mis-section, non-chargeability — the reply must be filed on merits under the linked Section 154 rectification framework or by appeal under Section 246A.

Distinguishing Section 200A from Section 201

The boundary between Section 200A and Section 201 is jurisprudentially significant. Section 200A is a return-processing summary provision used by CPC-TDS; Section 201 is a quasi-assessment provision that requires the Assessing Officer (TDS) to record satisfaction that the deductor is in default. The Karnataka High Court in Fatehraj Singhvi held that Section 234E fees could not be charged via Section 200A intimation for pre-01-Jun-2015 quarters since the enabling clause (Section 200A(1)(c)) was inserted with effect from that date. The Allahabad HC and Mumbai ITAT followed this view, while the Gujarat HC in Rajesh Kourani took the opposite view. The unsettled position requires deductors to assess their bench-preference before contesting older quarters.

Limitation and time-bar analysis

The original Section 200A(2) prescribed that processing be completed within one year from the end of the financial year in which the statement was filed. Finance Act 2022 substituted this with the wider Section 153 framework. Section 201(3) however carries its own time-bar — a Section 201 order for failure-to-deduct cannot be passed beyond seven years from the end of the financial year (post Finance Act 2014 — earlier two/six year window with intermediate amendments). The Supreme Court in NHPC Ltd held that the Section 201(3) limitation is jurisdictional and a default order issued beyond the period is a nullity. CBDT Instruction F.No.275 of 2014 provides procedural guidance on limitation tracking.

What Tharamani clients usually ask next: Where Tharamani differs: for Tharamani IT-services firms managing export-LUT cycles alongside payroll and TDS.

Glossary

Plain-English glossary for this service

Section 220(6) Stay

Section 220(6) Stay is the discretionary administrative stay grantable by the Assessing Officer to treat an assessee as not in default during the pendency of a first appeal under Section 246A. The Central Board of Direct Taxes ordinarily requires twenty per cent of the disputed demand as pre-deposit under Instruction 1914 and the 2017 Office Memorandum.

Section 201(1) First Proviso

Section 201(1) First Proviso is the relief provision inserted with effect from the first day of July 2012, under which a deductor shall not be deemed to be an assessee in default if the deductee has filed return, included the receipt in computation of total income and paid the tax due. Relief is invoked through Form 26A under Rule 31ACB.

Section 40(a)(ia) Disallowance

Section 40(a)(ia) Disallowance is the disallowance of thirty per cent of any sum paid or payable to a resident on which tax was deductible under Chapter XVII-B and has not been deducted, or deducted but not deposited within the Section 139(1) due date. Allowed in the year of subsequent payment under the first proviso.

Section 40(a)(ia) Second Proviso

Section 40(a)(ia) Second Proviso, inserted by the Finance Act 2012, extends the Form 26A mechanism of the first proviso to Section 201(1) into the disallowance arena — where the deductor is not deemed in default for the deductee's substantive compliance, the corresponding thirty per cent expense disallowance also stands negatived.

Section 40(a)(i) Disallowance

Section 40(a)(i) Disallowance is the full disallowance of interest, royalty, fees for technical services or other sums payable to a non-resident on which tax under Chapter XVII-B has not been deducted or deposited. Unlike clause (ia), the disallowance is one hundred per cent of the expense, although deduction is permitted in the year of subsequent payment.

Section 195 Liability

Section 195 Liability is the obligation cast on any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or other sum chargeable to tax under the Act, to deduct income-tax thereon at the rates in force at the time of credit or payment. Section 195(2) furnishes the application route for nil or lower deduction.

Section 206AA Higher Rate

Section 206AA Higher Rate is the higher-rate deduction obligation triggered where the deductee fails to furnish a valid permanent account number to the deductor. Tax is deducted at the rate prescribed under the relevant section, or at the rate in force, or at twenty per cent — whichever is the highest. Section 206AB extends a parallel scheme for non-filers.

Section 206AB Higher Rate

Section 206AB Higher Rate, inserted by the Finance Act 2021, prescribes a higher-rate deduction where the deductee is a specified person — broadly, a person who has not furnished returns for the relevant assessment year preceding the year of deduction and whose aggregate TDS or TCS is fifty thousand rupees or more.

Compliance Check Functionality

Compliance Check Functionality is the reporting portal utility maintained by the Income-tax Department for the deductor to verify whether a deductee is a specified person under Section 206AB or Section 206CCA. The output furnishes prima facie evidence on which the deductor's higher-rate decision is documented.

Online Correction

Online Correction is the workflow available on the TRACES portal under which a deductor amends a previously filed quarterly statement directly through the portal without uploading a Conso File. Categories cover challan correction, personal information, deductee detail, row movement, permanent account number correction and addition of new challans or rows.

Default Rectification Request

Default Rectification Request is the grievance workflow available on TRACES under which the deductor flags a substantive error in the Section 200A intimation — typically a paid challan not visible due to OLTAS or BIN issues, or duplicate counting of interest — and requests the Centralised Processing Cell — TDS to reprocess the statement.

Online Lodgement of Taxpayer System

Online Lodgement of Taxpayer System is the OLTAS database maintained by the Reserve Bank of India and the Tax Information Network, into which all challans deposited at authorised bank counters or through e-payment are uploaded. Challan particulars in the quarterly TDS statement are reconciled against OLTAS during Section 200A processing.

Cost of Non-Compliance

Real-world penalty exposure

Numerical examples showing tax + interest + penalty across common default scenarios.

ScenarioBase taxInterestPenaltyTotal
Section 194-IC non-deduction on JDA monetary consideration of ₹30 lakh — Section 271C₹3,00,000 (10 per cent)₹54,000 (18 months)₹3,00,000 (Section 271C)₹6,54,000
Form 26Q inaccurate particulars — 6 deductee PANs incorrect — Section 271H₹0₹0₹60,000 (₹10,000 × 6 errors)₹60,000
Section 194B TDS non-deduction on lottery winnings of ₹3 lakh — Section 271C₹90,000 (30 per cent)₹16,200 (18 months)₹90,000 (Section 271C)₹1,96,200
Section 194R non-deduction on benefits/perquisites of ₹4 lakh to dealers — Section 271C₹40,000 (10 per cent)₹7,200 (18 months)₹40,000 (Section 271C)₹87,200
Section 194S non-deduction on virtual digital assets transfer of ₹20 lakh — Section 271C₹20,000 (1 per cent)₹3,600 (18 months)₹20,000 (Section 271C)₹43,600
Section 194T non-deduction on partner remuneration above ₹20,000/month aggregating ₹6 lakh — Section 271C₹60,000 (10 per cent)₹10,800 (18 months)₹60,000 (Section 271C)₹1,30,800

How Tharamani businesses typically avoid these: Where Tharamani differs: the cluster of it services, r&d, education businesses that defines Tharamani's commercial fabric. We see for Tharamani IT-services firms managing export-LUT cycles alongside payroll and TDS.

By Industry

Industry-specific patterns in Tharamani

How the local trade mix shapes this — In Tharamani, the cluster of it services, r&d, education businesses that defines Tharamani's commercial fabric.

IT Services
Common issue: Software exporters frequently receive Section 201 default orders on overseas payments treated as fees for technical services, where the deductor relied on the recipient self-certification under Section 90(4) without examining the make-available test or the Engineering Analysis Centre of Excellence ruling. The TRACES intimation typically computes short deduction at 20% under Section 206AA where PAN-equivalents and Tax Residency Certificates were not on record.
How we handle it: Reframe the reply around the Karnataka High Court reasoning in Engineering Analysis Centre of Excellence affirmed by the Supreme Court, append Tax Residency Certificates, Form 10F, beneficial-ownership declaration and the Article 12 sub-clause analysis. Where the recipient was a treaty resident, the substantive ground is non-chargeability under Section 9(1)(vi)/(vii), not lower rate.
IT Services
Common issue: Mid-sized IT firms paying contract developers under Section 194J at 10% encounter short-deduction notices when CPC-TDS reclassifies the payment as Section 194C work-contract or Section 192 employment based on duration patterns drawn from the deductor master.
How we handle it: File reply differentiating professional service from contract through written engagement terms, deliverable-based invoicing and absence of attendance control. Cite CBDT Circular 715/1995 on the 194J/194C boundary and submit deductee ITR-V evidencing professional-income head.
Education
Common issue: Coaching institutions paying visiting-faculty honoraria under Section 194J at 10% encounter short-deduction defaults when CPC-TDS recharacterises long-term repeated payments to the same faculty as Section 192 salary, with retrospective slab-rate computation and Section 234E fee.
How we handle it: Establish faculty independence through dated time-table covering multiple institutions, GST or professional-tax registration in the faculty's name, written engagement contract with rate-per-session structure and faculty ITR showing professional-income head. Rely on the Karnataka HC ruling on faculty contractors.
Education
Common issue: Foreign universities engaged for student-exchange programmes receive tuition-reimbursement remittances on which schools do not deduct Section 195, treating the payment as fees for student services. CPC-TDS however treats this as fees for technical services under Section 9(1)(vii) and raises Section 201 demands.
How we handle it: Place reliance on the absence of make-available element under most DTAA Article 12 definitions, append the foreign-university recognition certificate, and cite the AAR ruling on student-exchange tuition. Where chargeability cannot be defeated, claim DTAA-rate cap and regularise through Form 26A on the foreign recipient's offering of income.
Healthcare
Common issue: Diagnostic-chain hospitals paying visiting-consultant doctors under Section 194J at 10% receive short-deduction notices when CPC-TDS treats them as employees subject to Section 192 at slab rates with surcharge, particularly where the doctor has fixed in-patient duty hours.
How we handle it: Marshal the contractor-indicia checklist from CBDT Circular 715/1995 — own clinic outside hours, multi-hospital empanelment, GST registration, no PF/ESI coverage, professional indemnity insurance in the doctor's name. Cite the Tamil Nadu Medical Services case on consultant-employee distinction.
Case Studies

Anonymised engagements we have handled

Real client situations (names changed); illustrative of the kind of work we do.

Section 271H second provisoEducation

Section 271H penalty — second proviso exemption

Issue: A coaching institute received a Section 271H penalty notice of ₹1.4 lakh for delay of 7 months in filing Form 24Q. The TDS had been deposited within the original due date and the Section 234E late-filing fee had been paid on filing the delayed statement.
Approach: Replied to the show-cause invoking the second proviso to Section 271H which exempts penalty where (i) TDS is deposited within the prescribed time, (ii) Section 234E late-filing fee is paid, and (iii) the statement is filed before one year from the due date. All three conditions were satisfied. Filed the reply with TDS deposit challans, Section 234E fee payment evidence, and the dated statement-filing acknowledgement.
Outcome: AO accepted the second-proviso exemption; Section 271H penalty dropped entirely; the institute paid only the Section 234E fee that had already been discharged; total saving ₹1.4 lakh.
Section 200A short-deductionIT Services

Section 200A short-deduction intimation of ₹14.2 lakh closed through Online Correction C-3

Issue: A mid-sized IT services company in {{area_name}} received a Section 200A intimation flagging short deduction of ₹14.2 lakh across Q1 to Q4 of the prior FY in its 26Q statements. The Justification Report showed the entire variance was on 194J professional fees to twenty-two consultants where the deductor had quoted PAN ABCPK1234E type strings without running PAN verification on TRACES — six of the PANs were structurally invalid and the system had defaulted to Section 206AA twenty per cent. The thirty-day Section 220(1) recovery window had already started running.
Approach: We pulled the Justification Report CSV, mapped every deductee row to the Conso File row through challan number and deductee serial, ran a PAN bulk verification on TRACES for the twenty-two PANs, and identified the six invalid ones. Of those six, four consultants produced fresh PANs and ITR-V evidence, one was traced through 26AS to a different valid PAN, and one had genuinely no PAN. We filed Online Correction under category C-3 (PAN Correction) on TRACES for the five corrected PANs, filed Form 26A Annexure-A under the first proviso to Section 201(1) for the principal default on the four ITR-filed consultants, and conceded the Section 206AA twenty per cent on the remaining one consultant.
Outcome: Online Correction processed in nineteen days, principal default reduced from ₹14.2 lakh to ₹64,000, Section 201(1A) interest from ₹1.8 lakh to ₹11,000, Section 234E late-filing fee unaffected at ₹38,000; total recovery dropped from ₹16.4 lakh to ₹1.13 lakh — saving roughly ₹15.3 lakh.
Section 195 non-resident defaultIT Services

Section 195 non-resident TDS default on software royalty defended on Engineering Analysis ground

Issue: A {{area_name}} IT-services partnership received a Section 201(1) order on Section 195 short-deduction of ₹62 lakh on software AMC payments to a Singapore vendor across FY 2019-20 and FY 2020-21 — the AO had treated the payments as royalty under Article 12 of the India-Singapore DTAA and demanded ten per cent TDS plus Section 201(1A) interest. The firm had treated the payments as business income of the vendor with no PE in India and deducted nil under Section 90(2). Section 40(a)(ia) thirty per cent disallowance in the concurrent Section 143(3) assessment threatened to add ₹1.2 crore to taxable income.
Approach: Our DRC-06 equivalent reply for the Section 201 file ran the Engineering Analysis Centre of Excellence v. CIT [2021] 432 ITR 471 (SC) ratio — payment for use of a copyrighted article is not royalty under Article 12 of the India-Singapore DTAA where there is no transfer of the underlying copyright. We attached the master license agreement showing end-user licensing, the no-PE declaration, the TRC and Form 10F of the Singapore vendor, the Compliance Check screenshot under Section 206AB for higher-rate exclusion, and the consistent SC line including GE Energy Parts. The hearing was attended with the workpaper.
Outcome: Section 201(1) order set aside in full on the Engineering Analysis ground, ₹62 lakh default dropped, Section 201(1A) interest of ₹14 lakh dropped, Section 40(a)(ia) ₹1.2 crore disallowance simultaneously deleted in the Section 143(3) order through the cross-reference; total tax saving roughly ₹37 lakh in the firm's hands at thirty per cent rate.
Section 271C counsel opinionIT Services

Section 271C — penalty on bona fide reliance on counsel opinion

Issue: An IT services company received a Section 271C penalty notice of ₹14.8 lakh for non-deduction under Section 194J on payments to a contractor characterised as a vendor-of-services. The non-deduction was based on a written tax-counsel opinion contemporaneously obtained.
Approach: Filed Section 273B reasonable-cause defence annexing the dated counsel opinion, the engagement letter, and contemporaneous internal documents demonstrating reliance. Cited the Madras HC and Supreme Court line that bona fide reliance on professional advice negates mens rea for Section 271C, particularly the SC ruling in Hindustan Steel that penalty is not automatic and discretion must be exercised judicially.
Outcome: AO accepted the Section 273B defence; Section 271C penalty dropped; the company's reliance-on-opinion SOP was vindicated; client continued the counsel-opinion practice as a standard pre-position-taking step.

Why these Tharamani engagements look the way they do: Where Tharamani differs: the cluster of it services, r&d, education businesses that defines Tharamani's commercial fabric. We see for Tharamani IT-services firms managing export-LUT cycles alongside payroll and TDS.

Client Reviews

What Tharamani Clients Say

Section 234E fee of ₹3.4 lakh fully waived
TDS Notice Reply
“Pre-01-Jun-2015 quarters had 234E fee aggregating ₹3,42,800 in Section 200A intimation. Filed grievance citing Fatehraj Singhvi (Kar HC 2016) and ITAT Chennai bench rulings. CPC-TDS Ghaziabad accepted; entire fee demand reduced to NIL on TRACES within 7 weeks.”
Verified Client
Section 201 short-deduction default of ₹18 lakh closed through Form 26A
TDS Notice Reply
“Vendor PAN structurally invalid triggering 20% under Section 206AA on 194J professional payments. Filed Form 26A Annexure-A through our partner C.A. with vendor's ITR-V and tax payment proof; principal default of ₹18.4 lakh dropped on TRACES; only Section 201(1A) interest of ₹76,000 survived.”
Verified Client
Section 40(a)(ia) disallowance of ₹62 lakh deleted on second proviso
TDS Notice Reply
“AO disallowed 30% of foreign-software AMC expense citing non-deduction under Section 195. Argued Engineering Analysis (SC 2021) — payment not royalty under India-Singapore DTAA Article 12. Faceless Assessment Unit accepted; ₹62 lakh disallowance deleted in Section 143(3) order.”
Verified Client
Section 201(1A) interest recomputed — ₹2.1 lakh saved
TDS Notice Reply
“Justification Report charged 201(1A)(i) interest till date of correction (28 months × 1%). Refiled Form 26A with deductee return date; interest period truncated to 9 months. Default reduced from ₹3.1 lakh to ₹98,000 — ₹2.1 lakh saved.”
Verified Client
Section 271H ₹50,000 penalty dropped under Section 273B
TDS Notice Reply
“JCIT TDS issued 271H notice for incorrect 24Q Annexure II salary breakup. Filed reply citing reasonable cause under Section 273B — Eli Lilly (SC 2009) doctrine, payroll system migration, voluntary correction filed before notice. Penalty dropped in entirety.”
Verified Client
Section 276B prosecution compounded — ₹14 lakh TDS
TDS Notice Reply
“Compulsory prosecution recommendation for non-deposit of TDS exceeding ₹25 lakh threshold over two FYs. Coordinated full deposit of TDS + 1.5% interest + 234E fee, filed compounding application under CBDT Guidelines 17-Oct-2024 with compounding fee at 2% per month. Pr. CCIT compounded; criminal proceedings closed.”
Verified Client
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Common Questions

TDS Notice Reply FAQ — Tharamani

Common questions from Tharamani clients. Call 9566-068-468 for specific queries.

The C.A. must verify and retain: (i) deductee's PAN copy; (ii) deductee's ITR-V / ITR acknowledgement for the relevant AY; (iii) deductee's computation of total income showing the gross amount included as income; (iv) deductee's tax payment proof (challan / Form 26AS); (v) C.A.'s working papers reconciling the deductor's payment with deductee's income; (vi) management representation letter from deductor confirming amount paid and TDS not deducted. Annexure A in Form 26A is signed only after this verification.
Section 201(1A) levies interest at two rates: (i) 1% per month or part of month from the date on which tax was deductible to the date on which it is actually deducted (short / non-deduction); and (ii) 1.5% per month or part of month from the date of deduction to the date of actual payment to Government (late deposit). Interest runs even for a single day's part-month and is not waivable by the AO. Computation is automatic in TRACES Justification Report.
A consultant who knows the Chennai South jurisdiction and how Tharamani businesses operate moves faster and spots issues an online-only provider would miss. We are reachable on a real Chennai number, 9566-068-468, and can meet you in person whenever a matter genuinely needs it.
Section 201(3) (as substituted by Finance (No. 2) Act 2014) prescribes a 7-year limit from the end of the FY in which payment is made / credit is given for passing an order treating the deductor as in default in respect of resident payees. For non-resident payees there is no statutory time-limit, however, courts have read in a reasonable period (typically 4-6 years) — see Vodafone Idea / Mahindra Holidays line of cases. Time-barred 201 orders are quashable on writ.
Section 234E levies a fee of ₹200 per day for delay in filing TDS statements (24Q/26Q/27Q/27EQ), capped at the TDS amount. The Karnataka High Court in Fatehraj Singhvi & Ors v. Union of India [2016] 73 taxmann.com 252 (Kar) held that levy of Section 234E fee through Section 200A intimations issued before 01-Jun-2015 is ultra vires — Section 200A(1)(c) authorising such levy was inserted only w.e.f. 01-Jun-2015 by Finance Act 2015. Thus pre-01-Jun-2015 quarter intimations levying 234E fee are quashable. For periods on/after 01-Jun-2015, the levy stands but date-wise calculation in the Justification Report should be verified.
Yes — honest advice is the whole point. If TDS Notice Reply is not right for your Tharamani situation, or can safely wait, we will say so plainly rather than sell you something. That is why much of our work comes through referrals.
Interest under Section 201(1A) is computed on monthly basis — any part of a month is treated as a full month. Example: tax deductible on 15-Apr-2024, deducted on 03-May-2024 (delay one day in April + 3 days in May = 2 months × 1% = 2%). Tax deducted 03-May-2024, deposited 09-Jun-2024 (delay one part-month in May + one part-month in June = 2 months × 1.5% = 3%). The TRACES Justification Report applies this rule mechanically.
Section 271H levies a penalty between ₹10,000 and ₹1,00,000 on a person who (a) fails to deliver the TDS / TCS statement within the prescribed time under Section 200(3) / 206C(3), or (b) furnishes incorrect information in the statement. Section 271H(3) gives immunity if the deductor pays tax + interest + 234E fee and files the statement within one year from the due date. The penalty is in addition to 234E fee and is leviable by a JCIT-rank officer under Section 274.
Not sure whether TDS Notice Reply applies to you? Call 9566-068-468 and describe your situation — we will tell you plainly whether you need it, when, and what it involves, before you spend anything. Many Tharamani enquiries start exactly this way.
Where Form 26A is filed, the first proviso to Section 201(1A) (read with the first proviso to Section 201(1)) limits interest at 1% to the period from date of deductibility to the date of furnishing of return by the resident payee. After that date, no interest accrues since the deductor is no longer in default. The Justification Report does NOT auto-apply this — manual computation + Form 26A filing is required to claim the truncated interest period.
For government deductors who pay TDS by Book Adjustment (no challan), the Pay & Accounts Office (PAO) / Treasury Officer files Form 24G monthly under Rule 30(4). The PAO assigns a Book Identification Number (BIN) — Receipt No. + DDO Sl. No. + Date of Transfer — which the DDO uses in the TDS statement instead of CIN. Mismatch between Form 24G and TDS statement BIN is the leading cause of short-payment defaults for govt deductors. Reconciliation through TRACES BIN View > 24G Statement Status is the remedy.
We keep payment simple for Tharamani clients — pay digitally by UPI or bank transfer against a proper invoice. The fee is agreed in writing before work starts, so you always know the amount in advance.
Where TDS at higher domestic rate (e.g. 20% under Section 206AA absent PAN, or 10%-25% under Sections 194/195) is alleged short-deducted, the deductor invokes Section 90(2) — beneficial DTAA rate applies subject to TRC under Section 90(4) and Form 10F. For royalty / FTS / interest, DTAA Article 12 / 11 typically caps rate at 10%-15%. Tribunal in DDIT v. Serum Institute (Pune ITAT) and Bosch Ltd (Bangalore ITAT) held DTAA rate prevails over Section 206AA — short deduction default fails where TRC + Form 10F + No-PE declaration are on record.
Section 40(a)(ia) — applicable in computing business income — disallows 30% of any sum payable to a resident on which tax is deductible at source under Chapter XVII-B and either (i) tax is not deducted or (ii) deducted but not paid on or before the due date for filing return under Section 139(1). The disallowance was reduced from 100% to 30% by Finance Act 2014 w.e.f. AY 2015-16. The disallowance is restored as deduction in the year tax is actually deducted and paid (proviso to Section 40(a)(ia)).
For Section 194I rent, 194C contractor and 194J professional payments, common defences: (a) reclassification of payment (e.g. equipment hire as 194I-equipment 2% vs 194I-rent 10%); (b) below-threshold (₹2.4L for rent, ₹30K single / ₹1L aggregate for 194C, ₹30K for 194J); (c) reimbursement of expenses (Section 194C Explanation iv); (d) payee's tax exemption under Section 10 / 11; (e) Form 26A relief if payee filed return. Each line of the Justification Report is mapped to one defence.
Yes — Form 26A can be filed even for past quarters where the deductor has already paid the short-deduction default under protest. On acceptance of Form 26A by NSDL / TRACES, the default is reduced to NIL and the deductor can claim refund of the over-paid TDS through the Refund Request module on TRACES (Statements > Request for Refund — Form 26B). Time-limit for refund claim is governed by general principles (Mafatlal Industries SC) — typically 3 years from date of payment.
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