Facing a Show Cause Notice for Unpaid Professional Tax: Should We Trust Our CA or Settle?

Dear professionals,

We have received a show cause notice from the professional tax department due to non-payment of professional tax for the financial years 2021-22 and 2022-23. Our company's CA took a PTEC and PTRC in the name of our company. However, when we approached the concerned PT officer, he informed us that it is mandatory to obtain a PTEC certificate in the name of the company director as well, which we do not have. Now, he is threatening to enforce thrice the penalty with interest and demanding a settlement amount. Our CA is ignoring the situation, stating that nothing will happen. We are confused about what to do next. Should we take this show cause notice lightly based on our CA's advice, or is it better to meet the concerned officer and try to settle this issue amicably? What would be the legal consequences of each option? Please advise.

While obtaining PTEC, you should mention the details of the directors as well. As you have a separate PTRC, are you deducting the PT amount from the directors and remitting the same? If so, then you can submit the proof and close it.

You can't ignore any show cause notices from any of the government authorities, and the penalty for non-submission of PT returns is Rs. 1000/- per year. Authorities have the right to attach the notices to the bank, freeze bank accounts, and initiate court proceedings as well.

It is legally required for each director to obtain a PAN number in their own name and pay the taxes. Failure to do so may result in the officer issuing a show cause notice and penalty. You need to check; I think the penalty is ₹1000.