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Facts
The assessee filed 18 appeals against orders rejecting their appeals due to delay in filing. These appeals related to assessment years 2013-14, 2014-15, and 2015-16. The core issue was the levy of late fees under Section 234E of the Income Tax Act while processing TDS statements under Section 200A of the Act.
Held
The Tribunal held that the Assessing Officer (AO) was not justified in levying late fees under Section 234E of the Act for assessment years prior to June 1, 2015. This was because the enabling provision, Section 200A(1)(c), was introduced later, and prior to its introduction, there was no mechanism to levy such fees while processing TDS statements under Section 200A. The Tribunal relied on High Court and Coordinate Bench decisions.
Key Issues
Whether the AO was justified in levying late fee under Section 234E of the Income Tax Act while processing TDS statements under Section 200A for assessment years prior to the amendment of Section 200A(1)(c) of the Act.
Sections Cited
200A, 234E, 264C
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER BENCH :
Aforesaid 18 appeals filed by the assessee for Assessment Years (AYs) 2013-14, 2014-15 & 2015-16 arises out of identical orders of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 10.11.2022, rejecting the appeals on account of delay to 1053/Chny/2023 :- 2 -: in filing appeals, and not adjudicating the matter on merits in respect of intimation u/s 200A of the Income-tax Act, 1961 (hereinafter “the Act”) issued by Assistant Commissioner of Income Tax, Central Processing Cell-TDS (hereafter “A.O”) .
The facts in all the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For brevity, we shall take up the appeal in for A.Y 2013-14 as lead case. The main grounds of appeal on merit raised by the assessee for A.Y 2013-14 are as under:
The appellant submits that the levy of late fee U/s 234E of the Act, in the orders passed U/s 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. It is submitted that the TDS orders, though passed after the introduction of the amendment, the levy of such fees U/s 234E of the Act for the period prior to 01/06/2015 is incorrect and erroneous. Since, the amendment introduced should be construed as applicable only from quarters falling after the said date. As per the order of this Tribunal, in ITA No’s 343 to 350/Chny/2021 dated 24/02/2022, by citing High Court & Tribunal judgments, based on the above submission, the appeal has been allowed in favour of the Assessee/Appellant.
The brief facts of the case are that the assessee-company was formerly known as Vims Impex Ltd., which is subsequently merged with M/s. Savorit Ltd. pursuant to the NCLT order dated 04.07.2019.
Thereafter, the name of merged entity, M/s Savorit Ltd. was changed to 1053/Chny/2023 :- 3 -: to M/s. Gopuram Enterprises Ltd., and later changed to M/s. Gopuram Enterprises Pvt. Ltd. The assessee-company filed its quarterly e-TDS returns belatedly beyond due date prescribed under the Act for all quarters of AYs 2013-14, 2014-15 & 2015-16. The AO, CPC, TDS Cell, processed TDS return filed by the assessee u/s.200A of the Act, and levied late fees u/s.234E of the Act. The assessee had filed appeals against the order of the AO, CPC, TDS Cell, with delay of more than 2000 days. The Ld.CIT(A) dismissed the appeals filed by the assessee in limine by not condoning the delay in filing of the appeals on the ground that the assessee could not explain huge delay in filing of the appeals. Aggrieved by the orders of the Ld. CIT(A), the assessee filled appeal before this Tribunal, and the Tribunal upheld the order of Ld. CIT(A). The assessee filled appeal before the Hon’ble Madras High Court and the Hon’ble High court in TCA No 373 of 2023 and others dated 22-04-2025, condoned the delay in filling appeals and restored the matters to the file of Tribunal for hearing on merits on 06.05.2025. Accordingly, the appeals were heard on merit.
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), which enabled such levy, was inserted only with effect from 01.06.2015. to 1053/Chny/2023 :- 4 -:
Therefore, for AYs 2013-14 to 2015-16, 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. Ltd. vs. ACIT 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.
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 to 2014-15. 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: to 1053/Chny/2023 :- 5 -:
“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 merged entity, 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 & 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? 11. 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;” to 1053/Chny/2023 :- 6 -:
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 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 to 1053/Chny/2023 :- 7 -:
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 15. 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 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 to 1053/Chny/2023 :- 8 -:
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 issues are involved in assessee’s to 1053/Chny/2023 also. Accordingly, our findings and directions above in shall apply mutatis mutandis to those appeals as well. Therefore, for the similar reasons, those appeals are also allowed for statistical purposes in line with our above directions.
In the result, all the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 11th day of June, 2025 at Chennai.