Loading judgment…
Facts
The assessee filed TDS statements belatedly for F.Y. 2012-13 and 2013-14. The AO levied late fees under Section 234E while processing these statements under Section 200A. The CIT(A) upheld this levy.
Held
The Tribunal held that Section 200A(1)(c) of the Act, which enables the levy of late fees, was inserted only with effect from 01.06.2015. Therefore, for assessment years prior to this date, the AO could not levy late fees under Section 234E while processing TDS statements under Section 200A.
Key Issues
Whether late fee under Section 234E can be levied while processing TDS statements under Section 200A for assessment years prior to 01.06.2015, when Section 200A(1)(c) was not in force.
Sections Cited
234E, 200A, 154, 200A(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeals filed by the assessee for Assessment Years (AYs) 2013-14 & 2014-15 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 14.05.2025, confirming the late fee charged u/s 234E of the Income Tax Act (hereinafter “the Act”) while processing the quarterly TDS returns for F.Y 2012-13 and F.Y 2013-14 U/S 154/200A of the & 1742/Chny/2025 Ramamurthy D.P :- 2 -:
Act by Assistant Commissioner of Income Tax, Central Processing Cell-TDS (hereafter “A.O”) .
The facts in both the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For 2013-14 as lead case. The main grounds of appeal on merit raised by the assessee for A.Y 2013-14 are as under:
“1. The order of the NFAC, Delhi dated 14.05.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1076196630(1) for the above mentioned Assessment Year is contrary to law, fact and in circumstances of the case.
2. The NFAC, Delhi erred in confirming the passing of the order under Section 200A the Act and consequently erred in confirming the quantification of late filing levy under Section 234E of the Act to the tune of Rs. 24,200/- without assigning proper reasons and justification.
3. The NFAC, Delhi failed to appreciate that the levy of fee under Section 234E of the Act on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.
4. The NFAC, Delhi failed to appreciate that the levy of late fee under Section 234E of the Act in the order passed under Section 200A of the Act in relation to the period prior to 01.06.2015 was wholly unjustified and without jurisdiction especially in view of the prospective amendment introduced in Section 200A of the Act w.e.f. 01.06.2015, thereby vitiating the decision rendered in the impugned order in its entirety.
5. The NFAC, Delhi failed to appreciate that the order passed under Section 200A of the Act was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.
& 1742/Chny/2025 Ramamurthy D.P :- 3 -:
6. The NFAC, Delhi failed to appreciate that having not adhered to the prescription of faceless regime, the consequential appellate order passed should be reckoned as bad in law.
7. The NFAC, Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles of nature justice would be nullity in law.”
The assessee has filed its quarterly statements for Quarter 2 of F.Y. 2012-13 in Form 27EQ on 02.11.2012 against the due date of 15.10.2012, resulting in a delay of 18 days. The statement in Form 26Q for Quarter-2 was filed on 05.11.2012 against the due date of 15.10.2012, with a delay of 21 days. Further, the statement in Form 27EQ/26Q for Quarter-3 was filed on 25.02.2013 against the due date of 15.01.2013, with a delay of 41 days. The AO, for the above delays, levied late fees under section 234E of the Act amounting to Rs. 3,600/- for Q2 (18 days), Rs. 4,200/- for Q2 (21 days), and Rs. 16,400/- for Q3 (41 days). Since the returns were filed belatedly, the A.O while processing return u/s 200A , charged late fee under section 234E at Rs. 200/- per day of default, subject to the amount of TDS deductible.
The assessee had filed appeals against the order of the AO, CPC, TDS Cell. The Ld.CIT(A) upheld the charging of late fee u/s 234E while processing return u/s 200A of the Act for F.Y 2013-14 relying on & 1742/Chny/2025 Ramamurthy D.P :- 4 -: the-decision of Karnatka High Court in the case of Fatheraj Singhvi Vs UOI (2650/2015).
The Ld. Authorized Representative (AR) has submitted that the AO levied late fee under Section 234E of the Act while processing the TDS returns u/s. 200A of the Act. However, Section 200A(1)(c) of the Act, which enabled such levy, was inserted only with effect from 01.06.2015. Therefore, for AYs 2013-14 to 2014-15, the AO did not have the authority to levy such fees. The Ld. AR relied on the judgment of the Hon’ble Madras High Court in the case of M/s. True Blue Voice India Pvt. Ltd. vs. CCIT & Ors. (WP Nos. 2700 & 2703 of 2022) dated 09.10.2023, wherein it was held that in the absence of enabling provisions u/s. 200A of the Act during the relevant assessment years, no fee could be levied u/s. 234E of the Act. The Ld. AR also placed reliance on the order of the Co-ordinate Bench of this Tribunal in the assessee’s own case in M/s. Gopuram Enterprises Pvt. to 1007/Chny/2024 dated 26.06.2024.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
& 1742/Chny/2025 Ramamurthy D.P :- 5 -:
We have heard the rival submissions, and perused the materials available on record. The only issue to be adjudicated in these appeals is whether A.O was justified to levy late fee charged u/s. 234E of the Act while processing TDS statements u/s. 200A of the Act for the quarters of Financial Year 2012-13 and 2013-14. The division bench of Hon’ble Jurisdictional High Court in the case of M/s. True Blue Voice India Pvt. Ltd. vs. CCIT, in W.P No 2700& 2703 of 2022 , vide order dated 09.10.202 has decided the issue as under:
“17. In view of the above, it is made clear that the respondent had had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014, 2014-2015. However, Section 200A(1)(c) of the Act was not introduced during the said assessment years. In the absence of any provisions under Section 200A of the Act, when they have processed the application for TDS under Section 200A, no late fee can be imposed under Section 234E. Hence, in such view of the matter, this Court feels that the impugned orders are liable to be set aside ”
The Coordinate Bench in the case of M/s. Gopuram Enterprises Pvt. Ltd. vs. ACIT, has deleted the late fee levied u/s. 234E of the Act in the intimation issued u/s. 200A of the Act while processing the quarterly TDS statements for A.Y 2012-13 and 2013-14 as under:
“ 4. We have heard ld. Counsel for the assessee and ld.DR. We have perused orders of the authorities below. We find that the issue involved in the present appeals filed by the assessee is on levy of late fee under section 234E of the Act, for belated filing of quarterly TDS returns beyond prescribed date and this issue is squarely covered by the decision of Hon’ble Jurisdictional Madras High Court in the case of M/s. True Blue Voice India Private Limited vs. CCIT & & 1742/Chny/2025 Ramamurthy D.P :- 6 -:
Ors (WP Nos. 2700 & 2703 of 2022) dated 09.10.2023 and held as under:-
‘’10. There is no dispute on the aspect of validity of the Section 234E of the Act. The only issue that has to be decided in the present case is as to whether the late fee can be imposed under Section 234E of the Act, while processing the statement of TDS under Section 200A of the Act for the subject assessment years?
On considering the submissions of both the learned counsel and while reading Section 234E of the Act, it appears that the Department/respondents can impose the late fee for the circumstances mentioned under Section 234E of the Act with effect from 01.07.2012, but not when they process the TDS under Section 200A of the Act. In the Finance Bill, 2015, Section 200A(1)(c) of the Act was introduced, which reads as follows:
“200A. Processing of statements of tax deducted at source.— (1) ...................... (a)...................... (b)........................ (c) the fee, if any, shall be computed in accordance with the provisions of section 234E;”
Further, the objects and reasons for introduction of Section 200A(1)(c) of the Act are as follows:
“Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) Under Chapter XVII-B of the Act, a person is required to deduct tax on certain specified payment at the specified rate if the payment exceeds the specified threshold. The person deducting tax (‘the deductor’) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax (‘the collector’) also is required to file a quarterly Tax Collection at Source (TCS) statement containing the details of collection of tax made during the quarter by the prescribed due date. In order to provide effective deterrence against delay in furnishing of TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Act to provide for levy of fee for late furnishing of TDS/TCS statement. The levy of fee under section 234E of the Act has proved to be an effective tool in improving the compliance in respect of timely submission of TDS/TCS statement by the deductor or collector. Finance (No.2) Act, 2009 inserted section 200A in the Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act. Currently, the provisions of sub-section (3) of section 200 of the Act enable the deductor to furnish TDS correction statement and & 1742/Chny/2025 Ramamurthy D.P :- 7 -: consequently, section 200A of the Act allows processing of the TDS correction statement. However, currently, there does not exist any provision for allowing a collector to file correction statement in respect of TCS statement which has been furnished. It is, therefore, proposed to amend the provisions of section 206C of the Act so as to allow the collector to furnish TCS correction statement. Currently, there does not exist any provision in the Act to enable processing of the TCS statement filed by the collector as available for processing of TDS statement. As the mechanism of TCS statement is similar to TDS statement, it is proposed to insert a provision in the Act for processing of TCS statements on the line of existing provisions for processing of TDS statement contained in section 200A of the Act. The proposed provision shall also incorporate the mechanism for computation of fee payable under section 234E of the Act.”
A reading of the above makes it clear that since no mechanism was available for determination of late fee payable under Section 234E of the Act at the time of processing TDS statements. Thus it was proposed to amend the provisions of Section 200A of the Act, so as to enable the computation of fee payable under Section 234E of the Act at the time of processing of TDS statement under Section 200A of he Act. Thus, the said sub-Section 200A(1)(c) of the Act was came to be inserted with effect from 01.06.2015.
Now the dispute is with regard to the assessment years 2012- 13, 201314, 2014-15 and the applicability of Section 200A(1)(c) of the Act for relevant assessment years. There is no dispute on the aspect that the TDS statement was filed under Section 200A of the Act and the respondent had also issued the intimation under Section 200A of the Act, which means the respondents have processed the returns under Section 200A of the Act. When the respondent had started to process the returns of the petitioner under Section 200A of the Act, obviously they have to follow the requirements under Section 200A of the Act. Section 200A(1)(c) of the Act was introduced with effect from 01.06.2015. A reading of the objects and reasons of the same makes it clear that since no mechanism was available, Section 200A(1)(c) of the Act was introduced for imposing late fee for the delay in filing statement of TDS. Therefore, from the introduction of the said Sub-Section it is clear that prior to the same, though Section 234E of the Act was introduced with effect from 01.07.2012, the Authorities were not empowered to impose the late fee while processing the statement of TDS under Section 200A of the Act
The learned counsel for the respondent advanced his arguments on the aspect of the imposition of late fee by applying Section 200A(1)(c) of the Act retrospectively. This Court is not in agreement with the said submissions of the respondent. Since, there was no provision for imposing the late fee under Section 234E of the Act while filing and processing the TDS returns under Section 200A of the Act, clause (c) to Sub-Section (1) to Section 200A was introduced with effect from 01.07.2012. Therefore, the aforesaid submission made by the learned counsel for the respondent is rejected by this Court.
Further it was stated by the respondent that they have no power to waive the late fee and only the Commissioner of Income Tax is empowered to pass the revised order by proper application of provision of Section 264C of the Act.
In view of the above, it is made clear that the respondent had had imposed the late fee only under Section 234E of the Act for the assessment years 2012- 2013, 2013-2014, 2015-2015. However, Section 200A(1)(c) of the Act was not introduced during the said assessment years. In the absence of any provisions & 1742/Chny/2025 Ramamurthy D.P :- 8 -:
under Section 200A of the Act, when they have processed the application for TDS under Section 200A, no late fee can be imposed under Section 234E. Hence, in such view of the matter, this Court feels that the impugned orders are liable to be set aside’’
The Co-ordinate Bench of the Tribunal also in the case of M/s. M.F. Textiles Pvt.Ltd. Vs. ACIT in & 579/Chny/2021 dated 24.02.2022 had considered an identical issue in light of provisions of section 234E of the Act and also amendment to section 200A by Finance Act, 2015 w.e.f. 01.06.2015 and held that in absence of enabling provision under section 200A of the Act, the Assessing Officer cannot levy late fee under section 234E of the Act for belated filing of quarterly TDS return for period prior to 01.06.2015.
6. In the present appeals, on perusal of the facts, we find that the assessment years involved are prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid. Hence, by respectfully following the decisions of the Hon'ble Jurisdictional Madras High Court in the case of M/s. True Blue Voice India Private Limited (supra) and Co-ordinate Bench in the case of M/s. M.F. Textiles Pvt. Ltd (supra), we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Since, late fee charged in the present case pertaining to the financial years 2012-2013 and 2013-14, we direct the Assessing Officer to delete the late fee charged under section 234E of the Act in the intimation issued under section 200A of the Act for the processing of quarterly TDS return filed by the assessee.”
Respectfully following the above decisions, we direct the A.O to delete the late fee charged u/s. 234E of the Act in the intimation issued u/s. 200A of the Act in processing of quarterly TDS statements filed by the assessee for the relevant Financial Year.
We find that the identical issue/s are involved in assessee’s also. Accordingly, our findings & 1742/Chny/2025 Ramamurthy D.P :- 9 -: mutandis to this appeal as well. Therefore, for the similar reasons, this appeal is also allowed for statistical purposes in line with our above directions.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on 28th day of August, 2025 at Chennai.