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Facts
M/s Excella Realtors Pvt. Ltd., engaged in construction and land development, faced a demand from TDS-CPC for ₹99,482 interest under Section 201(1A) and ₹46,400 late fee under Section 234E for Assessment Year 2014-15 (Financial Year 2013-14), arising from the processing of TDS statements. The CIT(A) confirmed this demand, leading to the current appeal before the Tribunal.
Held
The Tribunal ruled that the late fee under Section 234E for FY 2013-14 was unsustainable because the enabling provision in Section 200A(1)(c) came into effect only from 01.06.2015. It also held that the interest under Section 201(1A) was not chargeable as the assessee had deposited the TDS within the statutory due dates, and therefore directed the Assessing Officer to delete both the late fee and interest.
Key Issues
1. Whether late fee under Section 234E for Financial Year 2013-14 is leviable when the enabling provision in Section 200A(1)(c) was inserted with effect from 01.06.2015. 2. Whether interest under Section 201(1A) is chargeable if the TDS was deposited within the statutory due dates.
Sections Cited
200A(1), 200A(1)(c), 201(1A), 234E
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Income Tax Appellate Tribunal, “C” BENCH KOLKATA
Before: Shri Manunatha G & Shri Sonjoy Sarma
order
: November 03, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income-tax (Appeals), Kolkata [hereinafter referred to as “CIT(A)”] dated 01.10.2024, arising out of the order passed under section 200A(1) of the Income-tax Act, 1961 (“the Act”) for the assessment year 2014-15.
Brief facts of the Case are that the assessee, M/s Excella Relators Private Limited, is engaged in the business of construction and land development. A demand notice was issued by the TDS-CPC, Kolkata, raising a total demand of ₹4,59,653. After giving credit for certain adjustments available in the TRACES portal, an outstanding demand of ₹99,482 towards interest under section 201(1A) and ₹46,400 towards late fee under section 234E remained payable.
M/s Excella Realtors Pvt. Ltd 3. Aggrieved by the said computation, the assessee preferred an appeal before the CIT(A), who, however, confirmed the action of the TDS Officer. 4. Being further aggrieved, the assessee has preferred the present appeal before the Tribunal. The primary grounds raised by the assessee are that the order of the CIT(A) is bad in law and on facts as the levy of late fee under section 234E amounting to ₹46,400 for delayed filing of TDS return for the financial year 2013-14 is illegal and unjustified, since the enabling provision to levy such fee through processing of TDS statement under section 200A(1)(c) came into effect only from 01.06.2015. Moreover, The levy of interest under section 201(1A) amounting to ₹99,482 is not tenable, as the assessee had deposited the TDS within the prescribed time limit, and therefore, no interest was chargeable. The Ld. AR submitted that the levy of fee under section 234E of the Act for the financial year 2013-14 is bad in law, as the statutory provision empowering such levy was introduced only with effect from 1. June 2015 by way of amendment to section 200A(1) of the Act. Hence, any such levy for a period prior thereto is retrospective, arbitrary and unsustainable in law. The Ld. AR further contended that the interest under section 201(1A) has been wrongly computed, since the TDS in question was deposited within the statutory due dates, and therefore, the CIT(A) erred in sustaining such charge.
5. The Ld. DR relied upon the orders of the lower authorities and supported the levy of late fee and interest, contending that the CPC had correctly computed the same.
6. We have carefully considered the rival submissions and perused the material available on record. It is a matter of record that the impugned levy of fee under section 234E pertains to the financial year 2013-14. The provisions of section 234E were inserted by the Finance Act, 2012 w.e.f. 01.07.2012; however, the enabling provision for M/s Excella Realtors Pvt. Ltd computation of such fee while processing TDS statements under section 200A(1)(c) was inserted only by the Finance Act, 2015 w.e.f. 01.06.2015. In light of the decision of various High Courts, including Fatehraj Singhvi & Ors. v. Union of India [2016] 73 taxmann.com 252 (Karnataka), it has been consistently held that no fee under section 234E can be levied for defaults relating to the period prior to 01.06.2015. Accordingly, the levy of late fee of ₹46,400 for financial year 2013-14 is without authority of law and hence liable to be deleted. As regards the interest under section 201(1A) amounting to ₹99,480, we find that the CIT(A) has failed to verify the assessee’s contention that the tax was deposited within the prescribed time. Since the payment was duly made within the statutory limits, the levy of interest cannot be sustained. We, therefore, direct the Assessing Officer to delete the interest of ₹99,482 as well. In view of the above discussion, we hold that the levy of late fee u/s 234E amounting to ₹46,400 and the interest u/s 201(1A) amounting to ₹99,482 are unsustainable and the Assessing Officer hereby directed to delete the same. Accordingly, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed. Kolkata, the 3rd November, 2025.