2023 (11) TMI 542 - HC - Income Tax

Late fee u/s 234E - filing the quarterly statement in wrong form 24Q instead of Form 26Q which was revised later - as quarterly TDS returns were filed on time, and only the Form was incorrectly filed, the Tribunal remanded the matter back to the Assessing Authority to pass fresh orders - HELD THAT - It is not in dispute that the petitioner had filed the return on time. However, it was not in the correct Form, and it was revised. Therefore, when the petitioner had filed the return on time, there is no question of levying penalty and interest.

Summary

Issues: Impugning Ext. P6 order dated 03.03.2023 for Assessment Year 2018-19 on remand by the Tribunal regarding the demand of late fee under Section 234E of the Income Tax Act.

The petitioner, an Armed Forces Veterans Canteen, was served with a notice under Section 201 for not filing the quarterly statement for the second quarter of Financial Year 2017-18 in Form 26Q. Despite deducting and paying the tax, the petitioner filed Form 24Q instead, which was rejected. The correct Form was filed later, leading to the imposition of a late fee of Rs. 47,000/- and interest on the late fee payment of Rs. 567/-. The Commissioner of Income Tax (Appeals) affirmed the order, prompting the petitioner to approach the Income Tax Appellate Tribunal. The Tribunal remanded the matter back to the Assessing Authority, emphasizing that the quarterly TDS returns were filed on time, and only the Form was incorrectly filed.

On remand, the Assessing Authority initially assessed a 'Nil' demand in accordance with the Tribunal's order. However, in a subsequent order (Ext. P6), the Assessing Authority re-imposed a late fee of Rs. 47,000/-, interest of Rs. 23,500/-, and interest on late payment of Rs. 567/-. The petitioner's counsel argued that the earlier stand of the Assessing Officer was rejected by the Tribunal, which found that the return for the second quarter of the Financial Year 2017-18 was filed on time, albeit in the incorrect Form. As the correct Form was subsequently filed, the petitioner should not be penalized for late filing. It was also contended that since the tax deducted as TDS was deposited on time, there should be no levy of interest.

The Court acknowledged the petitioner's timely filing of the return, albeit in the incorrect Form, which was later revised. Therefore, the Court concluded that since the return was filed on time, there was no basis for imposing penalties or interest. Consequently, the writ petition was allowed, and the impugned order in Ext. P6 was set aside.