RAJ RAJESHWARI EDUCATION SOCIETY,HAMIRPUR vs. ITO-TDS, MANDI

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ITA 237/CHANDI/2026Status: DisposedITAT Chandigarh03 August 2026AY 2013-143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that while Section 234E existed, Section 200A did not initially provide the machinery for computing and levying this fee. Following the principle that a taxing provision should be construed in favor of the assessee when two reasonable interpretations exist, the levy was deemed invalid.

What were the facts?

The assessee filed a late TDS return for the fourth quarter of FY 2012-13. The CPC levied a fee of Rs. 66,350/- under Section 234E, which was confirmed by the CIT(A). The assessee appealed this levy.

What were the issues?

Whether the levy of fees under Section 234E was valid for TDS statements processed before the amendment to Section 200A in 2015, in the absence of a jurisdictional High Court decision.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH PHYSICAL HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.237/CHANDI/2026 (िनधा�रणवष� / Assessment Year: 2013-14) Raj Rajeshwari Education Society ITO - TDS बनाम/ Ward No.3, Partap Nagar Mandi (HP) - 175001 Vs. Hamirpur (HP) – 177001 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AAAAR-4920-R (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : None ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 16-07-2026 घोषणाकीतारीख /Date of Pronouncement : आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013- 14 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals), Mysore [CIT(A)] dated 13.11.2025 confirming levy of fees u/s 234E for Rs.66,350/- as levied by CPC for late filing of quarterly TDS return in Form No.26Q for fourth quarter of FY 2012-13. At the time of hearing, none appeared for assessee. The Ld. Sr. DR pleaded for dismissal of the appeal. 2. Upon perusal of impugned order, it could be seen that while confirming the levy of fees u/s 234E, Ld. CIT(A) has followed the decision of Hon’ble Gujarat High Court in the case of Rajesh Kourani

(83 Taxmann.com 137) favoring revenue in preference to the assessee favorable decision of Hon’ble Karnataka High Court in the case of Fatheraj Singhvi (73 Taxmann.com 252). It would also appear that no decision of jurisdictional High Court is available on this issue. 3. The view favoring the assessee has held that the provisions of Sec.234E were inserted by the Finance Act, 2012 with effect from 01.07.2012 and the provisions proposes a fee of ₹200 per day for delay in filing TDS/TCS statements, subject to the maximum amount of TDS/TCS. It also required the deductor to pay the fee before furnishing the delayed statement. It was, however, held that the provisions of Sec. 200A, which governs the processing of TDS statements, did not originally authorize the CPC-TDS / Assessing Officer to compute and levy the fee under Section 234E while processing TDS statements. It was only by The Finance Act, 2015 which amended the provisions of Sec. 200A (1) by inserting clauses enabling computation of fee u/s 234E during processing of TDS statements. It was finally held that although Sec. 234E existed from 01.07.2012, there was no machinery provision in Sec. 200A to levy and demand the fee through intimation before 01.06.2015. Therefore, intimations u/s 200A levying fee under Section 234E for TDS statements processed before 01.06.2025 were held to be invalid. However, opposite view has been taken by Hon’ble Gujarat High Court.

4.

Since no decision of Jurisdictional High Court exist on the issue, I apply the analogy of decision of Hon’ble Apex Court in the case of Vegetable Products Ltd. (88 ITR 192) holding that when two reasonable constructions of a taxing provision are possible, the construction that favors the assessee should be adopted. Accordingly, the view favoring the assessee is to be adopted. Consequently, the impugned levy of fees stand deleted. I order so. 5. The appeal stand allowed. Order pronounced on 03-08-2026 -Sd- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER AS Dated: 03-08-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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