Failure to Furnish complete withholding statement section 191
Prosecution for Failure to Furnish complete withholding statement Clause (ca) of sub-section (1) of section 191
The data contained in the withholding statements is essential for the purpose of expansion of tax base and to verify the declarations filed by the payees i.e. persons whose tax has been collected or deducted.
Hence, it is of utmost importance that the withholding agents furnish accurate and complete particulars of persons whose tax has been deducted or collected.
Accordingly, a new clause (Ca) has been inserted in section 191 according to which any person who, without reasonable excuse, fails to furnish particulars or complete or accurate particulars of persons mentioned in sub-section (1) of section 165 shall commit an offence punishable on conviction with a fine or imprisonment for a term not exceeding one year, or both.
Prior to the Finance Act, 2019, manufacturers, distributors, dealers, wholesalers or commercial importers of electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sectors were not required to give the name, CNIC, NTN and addresses of persons i.e., retailers in the withholding statement filed under section 165 due to clause (81) of Part IV of the Second Schedule.
However, the said clause (81) has been omitted through the Finance Act, 2019 and now the particulars mentioned above are required to be completely furnished in the withholding statement as the failure to furnish the same or furnishing incomplete or inaccurate particulars is an offence under clause (Ca) of sub-section (1) of section 191.
Similarly, the banking companies were not required to give particulars i.e name, ON IC, NTN and addresses of persons whose tax was deducted under section 231A (on cash withdrawal from bank) and section 151 (profit on debt) as per clause (81A), Part IV of the Second Schedule.
However, the said clause (81A) has been omitted through the Finance Act, 2019 and now the banks are required to furnish the name, CNIC, NTN and addresses of persons in the statement under section 165 of persons whose tax was deducted under section 231A and section 151 as the failure to furnish or to furnish inaccurate or incomplete particulars is a prosecutable offence as per clause (Ca) of sub-section (1) of section 191.