REKHCHAND PADAMCHAND JAIN,CHENNAI vs. INCOME TAX OFFICER, TDS WARD 2(1), CHENNAI

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ITA 3374/CHNY/2026Status: DisposedITAT Chennai27 October 2026AY 2021-20225 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 the Commissioner of Income Tax (Appeals) was correct in observing that he could not legislate or extend due dates beyond the Act's provisions, the core issue was not about extending the due date but about whether the assessee could be considered in default for the period during which the CBDT itself acknowledged difficulties in filing. The Tribunal noted that the TDS and TCS statements for the fourth quarter of FY 2020-21 are of the same character, relate to the same period, are filed on the same portal, and governed by Section 234E. The hardship caused by lockdowns, which led to CBDT extensions for TDS statements, applied equally to TCS statements. The extension granted for TDS statements until July 15, 2021, was a clear recognition by the CBDT that filing such statements could not reasonably be insisted upon during that period. Therefore, levying a fee on the assessee for the same period, merely because it was a TCS statement, would result in unequal treatment. The Tribunal ruled that, on the peculiar facts, the period from May 16, 2021, to July 15, 2021, should be excluded in computing the fee under Section 234E. The AO was directed to delete the fee of Rs. 12,200 for this period and recompute the demand. The fee for the undisputed period of delay was to stand.

What were the facts?

The assessee, Rekhchand Padamchand Jain, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Chennai, against the order of the Commissioner of Income Tax (Appeals)-2, Guwahati. The appeal pertains to Assessment Year 2021-22 and challenges an order passed by the Assessing Officer (AO), CPC-TDS, under Section 154 of the Income-tax Act, 1961. The AO had levied a fee of Rs. 55,600 under Section 234E for the delayed filing of the quarterly Tax Collected at Source (TCS) statement for the fourth quarter of FY 2020-21. The statement was due by May 15, 2021, but was filed on February 20, 2022. The assessee argued that due to the COVID-19 pandemic and subsequent lockdowns, filing was delayed, and the CBDT had extended due dates for TDS statements.

What were the issues?

1. Whether the fee under Section 234E of the Income-tax Act, 1961, can be levied for the period from May 16, 2021, to July 15, 2021, for the delayed filing of the TCS statement, considering the COVID-19 pandemic and CBDT circulars extending due dates for TDS statements. Assessee's Contention: The assessee argued that due to the complete lockdown caused by the COVID-19 pandemic, offices were closed, and public movement was restricted. They relied on CBDT Circular No. 12/2021, which extended the due date for filing TDS statements for the relevant quarter to July 15, 2021. The assessee contended that the same situation applied to TCS statements, and therefore, the fee for the period from May 16, 2021, to July 15, 2021 (61 days at Rs. 200 per day, totaling Rs. 12,200) should not have been levied as the circumstances were beyond their control. Revenue's Contention: The Revenue, through the learned Departmental Representative (DR), supported the orders of the lower authorities and prayed for the same to be upheld. No specific arguments or reliance on authorities were recorded for the Revenue.

Which sections of the Income-tax Act were involved?

Section 234E,Section 154,Section 200(3),Section 206C(3),Section 119

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

Hearing: 19.08.2026Pronounced: 27.10.2026

आयकरअपीलीयअधिकरण,‘A ’न्यायपीठ,चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI श्रीएसएसविश्वनेत्ररवि, न्याविकसदस्यएवंश्रीएस.आर.रघुनाथा, लेखासदस्यकेसमक्ष BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.3374/Chny/2026 ननिाारणवर्ा / Assessment Year: 2021-22 Rekhchand Padamchand Jain The Income Tax Officer N.H.05, GNT Road, Sholavaram vs. TDS Ward 2(1) Semblivaram Village Chennai. Chennai – 600 067. (प्रत्यर्थी/Respondent) [PAN:AAHPP0234G] (अपीलार्थी/Appellant) अपीलार्थीकीओरसे/Appellant by : --- None --- प्रत्यर्थीकीओरसे/Respondent by : Ms.Anshu Sharawat, Addl.CIT सुनवाईकीतारीख/Date of Hearing : 19.08.2026 घोर्णाकीतारीख/Date of Pronouncement : 27.10.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal has been preferred by the assessee against the order dated 22.04.2026 passed by the Learned Commissioner of Income Tax (Appeals)-2, Guwahati [hereinafter referred to as “the Ld.CIT(A)”], arising from the order dated 13.03.2026 passed by the Assessing Officer, CPC-TDS [hereinafter referred to as “the AO”], u/s.154 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), levying fee u/s.234E of the Act, for the Assessment Year (AY) 2021-22.

:-2-: ITA. No.3374/Chny/2026 2. At the time of hearing, none appeared on behalf of the assessee, nor was any petition seeking adjournment filed. Since the issue involved lies in a narrow compass and the relevant facts are available on record, we proceed to dispose of the appeal on the basis of the material on record and after hearing the ld.DR. 3. The brief facts of the case are that the assessee is a collector of tax at source assessed on the files of the Income Tax Officer, TDS Ward-2(1), Chennai, holding TAN - CHEP10300D. The quarterly statement of tax collected at source (TCS) for the fourth quarter of the financial year 2020-21, which was due to be filed on or before 15.05.2021, was filed by the assessee on 20.02.2022. While processing the said statement, the AO, vide order u/s.154 of the Act dated 13.03.2026, levied fee of Rs.55,600/- u/s.234E of the Act for the delay in filing the statement and raised a demand of Rs.82,790/-. 4. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) and submitted that, on account of the COVID-19 pandemic, the Government had ordered a complete lockdown during which schools, colleges, offices and shops were closed and the public was not permitted to move out; that, considering this situation, the CBDT extended the due date for filing the TDS statement for the said quarter till 15.07.2021 vide Circular No.12/2021; that the same situation prevailed in respect of the TCS statement, on account of which the assessee could not file it in time; and that, the circumstances being beyond the control of the assessee, the fee u/s.234E of the Act ought not to have been levied for the period from 16.05.2021 to 15.07.2021, i.e., 61 days @ Rs.200/- per day amounting to Rs.12,200/-. The Ld.CIT(A) dismissed the appeal, observing that the first appellate authority cannot, on its own motion, legislate on any subject or exercise any authority beyond that vested in him under the provisions of the Act. 5. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The learned CIT(A) has dismissed the appeal stating that the JCIT(Appeals) i.e, the first appellate authority cannot, on its own motion, legislate on any subject

:-3-: ITA. No.3374/Chny/2026 or exercise authority beyond what is vested in him under the provisions of the IT Act, 1961. 2. The AO has levied late fees of Rs.55,600/- u/s 234E for late filing of TCS return is not fair as per the facts and circumstances of the case. 3. Due to Covid 19 pandemic, the Government ordered complete lockdown. So all school, colleges, offices and shops were closed and the public were not allowed to move out of their house. 4. Considering the above situation, the CBDT had extended the due date for filing the TDS return till 15.07.2021 vide circular No 12/2021. 5. The situation and the fact remains the same for filing of TCS returns also. Hence, the assessee could not file the TCS return on time. 6. Since the situation was beyond the control of the assessee, the late fees should not have been calculated from 16.05.2021 till 15.07.2021 i.e 61 Days @ 200/- per day = Rs 12,200/-. 7. The appellant therefore prays to your kind authority to consider the facts and may delete the late fees of Rs.12,200/- (i.e from 16.05.2021 till 15.07.2021) levied u/s 234E and render justice.”

6.

The ld.DR supported the orders of the authorities below and prayed that the same be upheld.

7.

We have heard the ld.DR, perused the orders of the authorities below and carefully examined the material available on record. The assessee does not dispute that the TCS statement for the fourth quarter of the financial year 2020-21 was filed belatedly, or the levy of fee u/s.234E of the Act for the period after 15.07.2021. The grievance of the assessee, as is evident from the statement of facts and Ground Nos.6 and 7, is confined to the fee of Rs.12,200/- levied for the period from 16.05.2021 to 15.07.2021. The question for our consideration is, therefore, whether fee u/s.234E of the Act could be levied for the said period.

8.

Section 234E of the Act provides for a fee of Rs.200/- for every day during which the failure to deliver the statement within the time prescribed u/s.200(3) or the proviso to s.206C(3) of the Act continues. The fee is thus linked to the period of default beyond the time prescribed for filing the statement. The due date for the fourth quarter of the financial year 2020-21, i.e., January to March

:-4-: ITA. No.3374/Chny/2026 2021, fell in May 2021, in the midst of the second wave of the COVID-19 pandemic, when lockdowns were in force across the country. Recognising the difficulties faced by taxpayers during this period, the CBDT, in exercise of its powers u/s.119 of the Act, issued Circular No.9/2021 dated 20.05.2021 extending the time for filing the statement of deduction of tax for the last quarter of the financial year 2020-21 from 31.05.2021 to 30.06.2021, and thereafter Circular No.12/2021 dated 25.06.2021 further extending it to 15.07.2021. 9. It is true that the extensions granted by the said Circulars are expressed with reference to the statement of deduction of tax at source, and do not in terms refer to the statement of collection of tax at source for the same quarter. The Ld.CIT(A) was, to that extent, correct in observing that he could not himself extend the due date. However, the question before us is not one of extending the due date, but of whether, on the facts of the case, the assessee can be said to have been in default for the period during which the CBDT itself recognised that the filing of quarterly statements for the very same quarter was not practicable. The TDS statement and the TCS statement for the fourth quarter of the financial year 2020-21 are statements of the same character, relating to the same period, prepared from the same records, filed on the same portal and processed in the same manner, and the levy of fee for delay in filing either of them is governed by the same s.234E of the Act. The hardship on account of the lockdowns, which was the basis of the extensions granted by the CBDT, applied with equal force to a person filing the TCS statement for that quarter. The extension granted to persons filing TDS statements for the same quarter till 15.07.2021 is thus a clear recognition by the CBDT that, during the period up to that date, the filing of such statements could not reasonably be insisted upon. In these circumstances, levying fee on the assessee for the very same period, merely because the statement filed by him related to collection rather than deduction of tax, would result in unequal treatment of persons similarly placed, and would penalise the assessee for a period in respect of which, in the view of the CBDT itself, no default could fairly be attributed. In our considered

:-5-: ITA. No.3374/Chny/2026 view, on the peculiar facts of the case, the period from 16.05.2021 to 15.07.2021 ought to be excluded in computing the fee u/s.234E of the Act. 10. Accordingly, we set aside the order of the Ld.CIT(A) and direct the AO to delete the fee u/s.234E of the Act levied for the period from 16.05.2021 to 15.07.2021, i.e., 61 days, amounting to Rs.12,200/-, and to recompute the demand accordingly. The fee for the remaining period of delay, which has not been disputed by the assessee, shall stand. The grounds of appeal of the assessee are allowed. 11. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 27th October, 2026 at Chennai.

Sd/- Sd/- (एसएसविश्िनेत्ररवि) (एस. आर. रघुनार्था) (S. R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) लेखासदस्य/Accountant Member न्याययक सदस्य/Judicial Member चेन्नई/Chennai, ददनांक/Dated, the 27th October, 2026 Devadas आदेश की प्रतिलिपि अग्रेपिि/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. ववभागीय प्रनतननधि/DR 5. गार्ा फाईल/GF Digitally signed by DEVADAS DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.10.28 17:51:00 +05'30'

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