2022 (11) TMI 29 - AT - Income Tax

Late filing fee u/s 234E - late filing of TDS statement in Form No. 27Q - HELD THAT - As in the case of Shree Narayana Guru Smaraka Sangam Upper Primary School 2017 (1) TMI 1105 - KERALA HIGH COURT it has been held that there is no element of quid pro quo for collecting late fee, and that by incorporating section 234E, late fee has become mandatory. There is no opposition to this view. However, there also cannot be any denial that where the lapse came about due to a mere technical error, like the one in the present case, i.e., inadvertent wrong filing of TDS Statement, i.e., in Form No. 26QB, rather than in the applicable Form No. 27Q, there is no case for levy of late filing fee u/s 234E. CIT(A) has not also taken into consideration the fact that had the intention of the assessee been otherwise, it would not have deposited the entire TDS amount. Mere technical breach cannot lead to the assessee being penalized. CIT(A) has further not considered the fact that actually, no loss has been caused to the Revenue. The case of M/s G.B Builders Vs. ACIT 2022 (4) TMI 1313 - ITAT AHMEDABAD is to the same effect. Therein also, it was held that a mere technical inadvertent error did not invite levy of late filing fee u/s 234E of the Act. The case of Block Development Officer, Chaksu, Jaipur 2020 (6) TMI 565 - ITAT JAIPUR on the other hand, is not of much aid to the Department. There, the assessee had not filed any TDS Statement at all and it was on the facts of that particular case, that the Tribunal has confirmed the levy of late filing fee u/s 234E of the Act. Appeal is allowed.

Summary

Issues:
Late filing fee under section 234E of the Income Tax Act, 1961.

Analysis:
The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) confirming the charging of late filing fee of Rs. 3,64,600/- under section 234E for the late filing of TDS statement in Form No. 27Q for the assessment year 2016-17. The assessee had initially filed the TDS statement in Form 26QB instead of Form 27Q, leading to the imposition of late filing fee.

The facts revealed that the assessee, engaged in the business of architecture, purchased a property and deducted TDS at the prescribed rate, deposited it, and filed the TDS statement in Form 26QB instead of Form 27Q. Upon realizing the mistake, the assessee requested a refund, redeposited the TDS, and filed the correct TDS return. The Income Tax Department imposed late filing fees under section 234E.

The Ld. CIT(A) deleted the imposition of interest on late payment but upheld the late filing fee. The assessee contended that the late filing was due to inadvertent error and technical mistake, citing similar cases where late filing fees were not levied for such errors. The Ld. CIT(A) relied on legal precedents to justify the late filing fee, emphasizing that section 234E is mandatory and not punitive in nature.

The Tribunal considered the circumstances and legal positions presented by both parties. It acknowledged the mandatory nature of late filing fees under section 234E but highlighted that the error in this case was technical and inadvertent. The Tribunal noted that no loss was caused to the Revenue, and the intention of the assessee was not to evade payment. Relying on previous judgments, the Tribunal concluded that the mere technical error did not warrant the levy of late filing fees under section 234E.

In light of the arguments and precedents, the Tribunal accepted the grounds of appeal raised by the assessee, reversing the order under appeal and allowing the appeal. The Tribunal found merit in the grievance raised by the assessee and concluded that the late filing fee under section 234E was not justified in this case.

In conclusion, the Tribunal ruled in favor of the assessee, emphasizing that a technical inadvertent error in filing the TDS statement did not warrant the imposition of late filing fees under section 234E of the Income Tax Act, 1961.