2022 (7) TMI 1494 - AT - Income Tax

Late filing fee u/s 234E - late filing of TDS return - AR submitted that the assessee is maintaining cash system of accounting and due to some technical mistake TDS return was filed in Form 24Q2 on 20.10.2017 later on the mistake was rectified through filing of revised quarterly TDS return and filed the return in Form 26Q which was within the due date therefore the levy of fee u/s 234E does not arise - HELD THAT - We observe that the assessee filed quarterly TDS return in Form Q24 which has been processed By the CPC on 30.06.2018 and raised demand towards interest of late payment of Rs.567/- and late filing fee under Section 234E of Rs.47, 000/-. During the course of hearing the learned A.R. submitted acknowledgement of quarterly statement which is a computer generated Form 24Q and it was filed on 20.10.2017. From the orders of the lower authorities it is clear that the assessee has filed Form 24Q on 20.10.2017 and it was got revised later on but the lower authorities had not considered the original quarterly TDS return filed in Form 24Q and it has been considered from the date of revised return and imposed interest and late fee for delayed filing and payment. Assessee was unable to produce before us the other particulars regarding filing of Form 20Q 24Q and what was the data contained in Form 24Q and 26Q. He only submitted that the assessee is maintaining cash system of accounting. Therefore we think it fit to remit the matter to the AO for verification of the exact nature of the payment and which form is applicable i.e. 24Q or 26Q in the case of the assessee. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against order of CIT(A) for levy of late fee u/s 234E, Consideration of interest for late payment of tax, Applicability of cash system of accounting in TDS return filing, Dismissal of appeal by CIT(A) based on judgments, Verification of nature of payment and applicable form.

Analysis:
1. The appeal was filed against the order of CIT(A) regarding the levy of late fee under Section 234E. The appellant contended that the dismissal of the appeal was against natural justice as the late fee was imposed even though returns were filed in time and subsequently revised to correct a technical mistake. The appellant argued that the levy of late fee was not justified given the circumstances. The Tribunal observed that the lower authorities had not considered the original quarterly TDS return filed in Form 24Q and had imposed interest and late fee based on the revised return date. The matter was remitted to the AO for verification of the exact nature of the payment and the applicable form, either 24Q or 26Q, in the case of the assessee.

2. The issue of interest for late payment of tax was raised by the appellant, who followed a cash system of accounting. The appellant argued that interest should not be levied as the tax deducted at source was remitted within the specified time. The Tribunal noted the submissions but decided to remit the matter to the AO for further verification regarding the nature of the payment and the applicable form.

3. The appellant maintained that due to a technical mistake, the TDS return was initially filed in Form 24Q instead of Form 26Q, which was later rectified by filing a revised return. The appellant emphasized that the original returns were filed within the due date and should be considered as the date of filing. The appellant highlighted the challenges faced in filing E-TDS returns while following a cash system of accounting. The Tribunal acknowledged the appellant's arguments and remitted the matter for verification.

4. The dismissal of the appeal by CIT(A) was based on judgments that the appellant argued were not relevant to their case. The appellant sought relief from the levy of late fee and interest, emphasizing compliance with filing deadlines and the cash system of accounting. The Tribunal allowed the appeal for statistical purposes, remitting the matter for further verification by the AO.

In conclusion, the Tribunal allowed the appeal for statistical purposes, remitting the matter to the AO for verification of the nature of payment and the applicable form in the case of the assessee. The issues of late fee under Section 234E, interest for late payment of tax, and the challenges faced in TDS return filing due to a technical mistake and cash system of accounting were thoroughly considered in the judgment.