2024 (10) TMI 591 - AT - Income Tax

Confirmation of levy of fees u/s. 234E for late filing of quarterly TDS returns - Since the assessee did not file order issued u/s 200A, the appeal was held to be deficient by Ld. first appellate authority - AR held that Sec.200A(1)(c) was not introduced during the AYs 2012-13, 2013-14 2014-15 and in the absence of any such provisions prevailing at the time of processing of TDS return, no late fees u/s 234E could be levied. HELD THAT - As decided in Conceria International (P.) Ltd 2023 (12) TMI 281 - MADRAS HIGH COURT Section 234E of the Act is the substantive provision and its levy is not dependent on Section 200A(1)( c ) of the Act which only prescribes a recovery mechanism. A reading of Section 234E of the Act would make it clear that it gets attracted, the moment there is a failure on the part of a person to deliver the quarterly TDS statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C of the Act. The person committing the above breach / infraction renders himself liable to pay by way of fee a sum of Rs. 200/- for everyday during which the failure continues. Sub-section (3) in fact provides for a self assessment / payment of the fee while delivering or causing to deliver a statement in accordance with sub-section (3) of section 200 or the proviso to sub4 section (3) of section 206C - Sub-section (4) to section 234E of the Act also makes it clear that the above provision would be effective from 01-07-2012. Therefore, the submission that 234E of the Act would not be operable/effective unless and until Section 200A(1)(c) was introduced overlooks the fact that Section 234E (1) of the Act is the substantive provision. Levy of fees u/s 234E for AYs 2013- 14 2014-15 could not be faulted with.

Summary

Issues: Confirmation of levy of fees u/s. 234E for late filing of quarterly TDS returns.

The Appellate Tribunal ITAT Chennai addressed the grievance of the assessee regarding the confirmation of levy of fees u/s. 234E for late filing of quarterly TDS returns for AYs 2013-14 & 2014-15. The assessee's appeal was considered deficient by the first appellate authority due to non-filing of the order issued u/s 200A. The assessee contended that since Sec. 200A(1)(c) was not introduced during the relevant assessment years, no late fees u/s 234E could be imposed. The Tribunal noted the conflicting decisions of the High Court of Madras in two cases, one favoring the assessee and the other against. After thorough consideration of various case laws, the Tribunal analyzed the provisions of section 234E of the Act. It concluded that the late fee under section 234E is a substantive provision and is not dependent on section 200A(1)(c) which only prescribes a recovery mechanism. The Tribunal emphasized that the liability to pay the late fee arises once there is a failure to deliver the TDS statement on time, and the fee continues for each day of delay. Therefore, the Tribunal rejected the challenge to the levy of late fees for the relevant assessment years.

The Tribunal highlighted that the earlier decision favoring the assessee did not consider the contrary decisions of other High Courts, namely Karnataka and Gujarat, which supported the imposition of late fees under section 234E. Based on the detailed analysis and the subsequent decision in favor of the revenue, the Tribunal upheld the levy of fees u/s 234E for the assessment years in question. Consequently, both appeals were dismissed, affirming the imposition of late filing fees under section 234E.

In conclusion, the Tribunal clarified that the late fee under section 234E of the Act is an independent substantive provision and does not rely on the introduction of section 200A(1)(c) for its applicability. The decision provides a comprehensive analysis of the legal provisions and conflicting judicial interpretations, ultimately upholding the levy of late fees for late filing of TDS returns for the relevant assessment years.