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July 20, 2022

Section 234E for late fees is automatic

by CA Shivam Jaiswal in Income Tax

Section 234E for late fees is automatic

 Facts and Issues of the case

The Assistant Commissioner of Income Tax, CPC (TDS), Ghaziabad issued an intimation u/s 200A r.w.s. 154 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2016-17 levying a late fee under the provisions of section 234E of Rs.93,600/- by stating that the appellant had failed to file the quarterly statement of TDS of first quarter for financial year 2015-16 in Form No.26Q. Accordingly, the ACIT, CPC (TDS) Ghaziabad had levied penalty of late fee of Rs.93,600/- u/s 234E by intimation dated 02.02.2018 passed u/s 200A r.w.s. 154 of the Act.

Being aggrieved an appeal was filed before the ld. CIT(A). The ld. CIT(A) dismissed the appeal on the ground that the assessee had failed to demonstrate sufficient and reasonable cause for delay in filing the quarterly statement of TDS of first quarter for financial year 2015-16 in Form No.26Q.

Observations by the Court

The Court heard the ld. CIT-DR and perused the material on record.

The issue in the present appeal relates to the levy of late fees u/s 234E of the Act. The ACIT, CPC (TDS) had levied penalty u/s 234E of the Act for belated submission of tax deducted at source statement during the financial year 2015-16. It is only w.e.f. 01.06.2015 an amendment was made u/s 200A of the Act providing that fee u/s 234E could be computed at the time of processing of the return of income and intimation could be issued specifying the same payable by the dedutor as fee u/s 234E of the Act. late fees u/s 234E of the Act can be levied only prospectively w.e.f. 01.06.2015.

In the circumstances, we direct the ACIT, CPC (TDS), Ghaziabad to delete the late fee being levied u/s 234E of the Act.

Conclusion

It was an undisputed fact that there was a delay in filing the submission of the Quarterly Statement of TDS. When there is a delay, a late fee u/s 234E r.w.s. 200A of the Act is automatic and there is no discretion not to levy late fees with the TDS Officer. It was not the case of the appellant that there is denial of liability for late fee u/s 234E of the Act.

Gangamai-College-of-Engineering-Vs-ACIT-ITAT-Pune

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