ITAT: 234e for Late Fee Not Levy Before June 2015 for Delay TDS Filing

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) ruled that late fees under section 234E of the Income Tax Act,1961 for late TDS return filing shall not get levied before 01.06.2015.

Mr. Hardik Chordia, CA appeared for the appellant and Dr. K Shankar Prasad appeared for the respondent.

Karnataka Grameen Bank, the taxpayer has furnished a statement of tax deducted at source (TDS) for distinct quarters in Form No.26Q for AY 2013-14 to 2015-16 (FY 2012-13 to 2015-16) concerned various branches. There was a late filing of the above TDS statement and hence the AO by intimation u/s. 200A of the Income-Tax Act, 1961 [the Act] levied late fee u/s. 234E of the IncomeTax Act, 1961.

Under Sec.234E of the Act inserted by the Finance Act, 2012 w.e.f. 1.7.2012., if there was a late filing of the statement of the TDS in the mentioned time, an individual would be liable to make the payment, and filing the TDS return was obligated to get furnished through the way of the fee a sum of Rs 200 per day in which the failure persists.

The taxpayer to NFAC (CIT(A)/first appellate authority) that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by the provisions of Sec.200A(1)(c), (d) & (f) of the Act and those provisions w.e.f. 1.6.2015.

The NFAC/CIT(A) upheld the levy of interest u/s.234E of the Act on the ground that if the return of TDS was filed after 1.6.2015, then the levy of interest under section 234E is valid.

The Supreme court ruled that any ambiguity in the taxing statute must confirm the advantage of the subject or taxpayer. On the opposite side, any ambiguity must be permitted to get claimed for those subjects or taxpayers who represent that a case for the exemption comes in the parameters listed in the notification and they satisfy all the conditions precedent to claim the exemption.

A Coram consisting of Shri N V Vasudevan, vice president, and Shri Chandra Poojari, accountant member ruled that the levy of interest u/s.234E of the Act could not be upheld and rendered to be deleted. The appeals were permitted.