In a recent order by the Agra bench of the ITAT, it was clarified that the failure to file TDS/TCS return prior to 1st June 2015 will not lead to a late fee penalty under section 234E of the IT Act, 1961.
The IT Act Section 234E says that a late fee of Rs. 200 for every day, max up to the amount of TDS/TC), shall be levied upon failure of filing the TDS/TCS return by the due date.
The order was passed in response to a second appeal filed by Garrison Engineer, where the assessee was imposed a late fee by the IT department through a notice under section 200A/206CB of the Act, which enables clause (c) that was inserted in the section and became effective from 01 June 2015.
According to the assessee, no late fee should be levied since the TDS statement in concern was filed for a period up to 31st March 2015, which was before the said clause (c) in section 200A became effective.
In response to the appeal filed by the assessee, the ITAT committee concluded that there was no provision to levy fees under section 234E and so it was not a valid case to levy late fees on non-filing of the returns under section 200A of the Act. The bench also gave a reference to the similar case of Sudershan Goyal vs. DCIT, where the same verdict was passed and the payment of the late fee was denied on non-filing of TDS/TCS for the period of the assessment year before 01 June 2015.
“In its order, the ITAT said, We accept the grievance of the assessees as genuine. Accordingly, the orders of the CIT(A) are reversed and the fee so levied under section 234E of the Act is cancelled.”
