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Facts
The assessee, Central Ordnance Depot, filed TDS returns belatedly for assessment years 2014-15 and 2015-16. The appeals filed before the CIT(A)/NFAC were dismissed in limine due to a significant delay, which the assessee attributed to its nature as an Indian Army unit with specific operational constraints.
Held
The Tribunal held that a 'reasonable cause' existed for the delay in filing the appeals, thus condoning the delay. Regarding the levy of fees u/s 234E, the Tribunal decided that fees could only be levied for the period of delay after 01.06.2015, as the amendment to Section 200A empowering such levy was prospective.
Key Issues
Whether the delay in filing the appeals by the assessee, an Indian Army unit, can be condoned, and whether fees under Section 234E are leviable for the period prior to 01.06.2015.
Sections Cited
234E, 200A, 250
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER PER BENCH:
This batch of 8 appeals at the instance of assessee are directed against the separate orders dated 20.03.2025 and 21.03.2025 passed by the National Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’).
The only issue raised in these appeals is against the levy of fees u/s.234E for the quarters relating to Assessment Years 2014-15 and 2015-16.
Identical grounds have been raised by assessee in all these appeals. We therefore proceed to dispose of these appeals by this consolidated order for the sake of convenience. to 1446/PUN/2025 Central Ordnance Depot 4. We take as the Lead case for A.Y. 2014-15. Assessee has raised following grounds of appeal :
“1. On the facts and the circumstances of the case and in law, lower authorities erred in not condoning the delay in filing the appeal without appreciating the facts of the case. Your appellant prays for condonation of delay and granting an opportunity of hearing before lower authorities. Without prejudice to the above grounds of appeal
, following grounds are also taken on merit,
2. On the facts and in the circumstances of the case and in law. The Lower authorities erred in levying the late fee u/s 234E for a sum of Rs.12,360/- without appreciating the fact that enabling clause of levying fees u/s 200A was added w.e.f. 01/06/2015 and shall apply retrospectively and therefore your appellant prays for deletion of such penalty.
3. On the facts and in the circumstances of the case and in law. The Lower authorities erred in charging fees u/s 234E a sum of Rs. Rs. 12,360/- without considering the circumstance limitations, and difficulties faced by the unit which is under direct control of Ministry of Defense, and due to such difficulties like non-availability of BIN, unavailability of trained staff etc., the TDS returns were filled belatedly. Your appellant prays for waiver of the entire fees as charged by A.O.TDS. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of principle of natural justice.”
5. Brief facts common to these appeals are that TDS returns for the assessment years 2014-15 and 2015-16 corresponding to respective quarters captioned above were filed belatedly. The same were processed by Central Processing Cell (in short “CPC”) u/s.200A levying fee u/s.234E of the Act. Aggrieved assessee preferred appeal(s) before Ld. CIT(A)/NFAC with a delay of about 2455. Ld.CIT(A) dismissed the appeals in limine by not condoning the delay. Now the assessee is in appeal(s) before this Tribunal.
6. Ld. Counsel for the assessee submitted that ld.CIT(A) dismissed the appeal(s) in limine by not condoning the delay in to 1446/PUN/2025 Central Ordnance Depot filing of the appeal(s) before ld.CIT(A) inspite of reasonable cause giving rise to the said delay and the same are duly mentioned in the application for condonation of delay. For this, he referred to the condonation petition filed before this Tribunal and prayed that the delay in filing of the appeal(s) may please be condoned.
6.1 So far as merits of the case are concernedly, he fairly admitted that the Intimation u/s.200A of the Act in the instant case for the respective quarters have been framed after 01.06.2015. However, it has been consistently held in various decisions that no fee u/s.234E of the Act is leviable for the delay in filing of the TDS returns upto 01.06.2015. He therefore submitted that necessary directions may please be given to the ld. Assessing Officer (TDS) for verification of fees u/s.234E levied upto 31.05.2015 and on and from 01.06.2015 and necessary relief may be granted for the fee levied upto 31.05.2015. Reliance placed on the following decisions :
1. Olari Little Flower Kuries (P) Ltd. Vs. Union of India (2022 134 taxmann.com 111 (Kerala). 2. Fatheraj Singhvi Vs. Union of India (2016) 73 taxmann.com 252 (Karnataka). 3. Utkarsh Balaso Patil Vs. ITO (TDS) – to 1689/PUN/2025 order dated 10.09.2025. 4. Pancharatna Buildcon Pvt. Ltd. Vs. ITO – to 2062/PUN/2024 order dated 05.12.2024. 5. M/s. Office of the District Prosecution Vs. ACIT – to 262/Ind/2019 order 06.03.2020
Ld. Departmental Representative supported the orders passed by the lower authorities and vehemently argued for confirming the late fee levied u/s.234E of the Act. to 1446/PUN/2025 Central Ordnance Depot 8. We have heard the rival contentions and perused the records placed before us. The solitary issue in this batch of appeals is against the levy of fee u/s.234E of the Act by CPC for delay in filing the TDS quarterly returns. Assessee filed appeal(s) with a consideration delay and Ld. CIT(A)/NFAC placing reliance on various judicial precedents dismissed the appeals in limine by holding that the appellant has failed to give the sufficient reason with material evidence for the delay in filing of appeal. Finding of ld.CIT(A)/NFAC is verbatim for all the quarters under consideration and the same is reproduced below :
“5.16 In view of the above, respectfully following the judgments given by the Hon'ble Courts, I am of the considered opinion that the Appellant has failed to give the sufficient reason with material evidence for the delay of filing of appeal. Therefore, the delay in filing the appeal is not condoned. Since the condonation of delay is not granted, the Appeal filed is not maintainable on technical grounds. Under the admitted circumstances, in the present case, the Appellant has failed to substantiate that there was sufficient cause for not filing the appeal within the prescribed time frame and has as such failed to explain the unreasonable delay of 2455 days satisfactorily. Therefore, the delay in filing the appeal is not condoned.
Accordingly, the appeal of the appellant is treated as dismissed in limine.”
Before us, assessee has placed a petition for condonation of delay in filing of the appeal(s) before ld.CIT(A) and the same is reproduced below :
“The assessee in this matter is a unit of the Indian Army, an entity operating within a rigid hierarchical structure, lacking dedicated staff for tax-related work, and heavily reliant on a centralized salary disbursement unit for essential information.
COD Dehu Road was raised on 01st Oct 1942 as a Central Mechanical Transport Depot to hold spares for complete regiment of vehicle of American origin under the Command of Lt Col. It was re- designated as Central Ordnance Depot in 1943.
The Assessee is a critical operational unit within the Indian Army, functioning strictly within a highly structured and deeply hierarchical command system. This organizational framework fundamentally distinguishes it from commercial enterprises. Unlike typical businesses, the Assessee does not possess a dedicated, in-house tax compliance department or specialized personnel specifically trained and assigned to handle intricate tax-related work. The primary mission of an Indian Army unit is national defence and security, and all administrative functions, including salary disbursement and the associated Tax Deducted at Source (TDS), are managed through a centralized salary disbursement unit that operates at a higher organizational level.
The present dispute originates from an intimation issued by the Assistant Commissioner of Income Tax (ACIT), Centralized Processing Cell (CPC) - TDS u/s 200A. This intimation levies a fee under Section 234E of the Act. This fee specifically pertains to the delayed filing of the TDS Quarterly Statement in Form 24Q for the Financial Year 2013-14 and 2014-15. There is an admitted delay in filing appeal before Hon'ble CIT(A) against such intimation u/s 200A, a detailed chart showing the delay in filing the appeal is as follows:
TDS Financial Date of Date of Number Statement Year Intimation Filing of of Days Quarter Form No.35 Delayed Q1 2013-14 31/05/2016 21/03/2023 2485 Q2 2013-14 31/05/2016 21/03/2023 2485 Q3 2013-14 31/05/2016 21/03/2023 2485 Q4 2013-14 31/05/2016 21/03/2023 2485 Q1 2014-15 31/05/2016 21/03/2023 2485 Q2 2014-15 31/05/2016 21/03/2023 2485 Q3 2014-15 31/05/2016 21/03/2023 2485 Q4 2014-15 31/05/2016 21/03/2023 2485 The magnitude of this delay, might, at first glance, suggest significant negligence. However, for a military unit, the operational priorities and resource allocation are fundamentally different from those of a typical commercial enterprise. This prolonged delay is not a reflection of deliberate defiance or mala fide intent on the part of the Assessee. Instead, it is a direct consequence of the systemic limitations and the pronounced absence of specialized resources dedicated to a function considered ancillary to the unit's core mission of national defence.
The eventual filing of the appeal, albeit significantly belated, indicates a belated but determined effort towards compliance once the underlying issue was identified and administrative pathways for resolution were navigated, rather than a complete disregard for statutory obligations. Therefore, while the delay is an undeniable factual reality, its interpretation must be nuanced. This understanding shifts the focus from individual culpability to the inherent institutional challenges faced by the Assessee, a crucial distinction for the "reasonable cause" argument.
After hearing both the sides and perusing the reasons so stated, we are satisfied that ‘reasonable cause’ prevented the assessee to file the appeals within the stipulated time. We note that the delay was not intentional and assessee would not have gained from filing the appeals with a delay. We therefore in light of judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condone the delay in filing the appeals before ld.CIT(A) for the respective quarters under consideration.
Now coming to merits of the issue, we observe that the TDS returns for A.Y. 2014-15 and 2015-16 have been filed on 15.05.2016 and the CPC processed the TDS returns u/s.200A of the Act on 31.05.2016. The chart indicating these details is reproduced below :
We note that amendment brought in Finance Act, 2015 w.e.f. 01.06.2015 under Section 200A (clause (c)] of the Act is prospective in nature and the Revenue authorities are empowered to charge fee u/s.234E of the Act only after 01.06.2015 and not prior to that date by virtue of various judicial precedents. to 1446/PUN/2025 Central Ordnance Depot 13. In the instant appeals, we notice that the processing of the TDS returns by CPC have been carried out after 01.06.2015. Now in this given situation before us, it has been contended that the fee levied u/s.234E upto the date of amendment effective from 01.06.2015 deserved to be deleted and only the fee levied u/s.234E for the delay from 01.06.2016 onwards needs to be sustained in light of the settled judicial precedents.
Though the ld. Counsel for the assessee has referred and relied on various decisions, we find Coordinate Bench, Indore has dealt the very same issue in the case of M/s. Office of The District Prosecution Vs. ACIT in to 262/Ind/2019 for A.Yrs. 2014-15 and A.Y. 2015-16 order dated 06.03.2020 has held that even in cases where processing of the TDS returns u/s.200A of the Act is after 01.06.2015, in such cases also fee u/s.234E of the Act could not be levied upto 01.06.2015 and only for the remaining period of delay from 01.06.2015 onwards fees u/s.234E of the Act could be levied on the assessee. Relevant observation of the Tribunal reads as under :
“7. We have heard the rival contentions and perused the record placed before us.
From perusal of the grounds we find that only one issue needs to be adjudicated as to whether the Revenue authorities were justified in levying the late fees u/s 234E of the Act while processing the statement of tax deducted at source u/s 200A of the Act after the amendment was brought in w.e.f. 01.06.2015 in the provisions of section 200A of the Act. The common fact in all these cases is that the date of filing TDS return as well as date of Centralized Processing Centre (In short "CPC") order is after 01.06.2015. We observe that recently Coordinate Bench of Jaipur in the case of Shri Uttam Chand Gangwal Vs ACIT in dated 23/01/2019 adjudicated the similar issue of levy of fee u/s 234E of the Act in the case where TDS return and the CPC order was passed after 01.06.2015. Following decision was rendered by the Coordinate Bench:
“In the instant case, the assessee filed its TDS return in Form No. 26Q for the quarter ended 31st March, 2015 on 22nd July, 2015 and the same was processed and an intimation dated 30 July, 2015 was issued by the AO u/s 200A of the Act. Thus, both the filing of the return of income by the assessee and processing thereof has happened much after 1.6.2015 i.e, the date of assumption of jurisdiction by the AO u/s 200A(1)(C) to levy fees under section 234E of the Act. Even though the quarterly return pertains to quarter ended 31.3.2015, the fact remains that there is a continuing default even after 1.6.2015 and the return was actually filed on 22.07.2015. The said provisions cannot be read to say that where an assessee file his return of income for the period falling after 1.6.2015 and there is a delay on his part to file the return in time, he will suffer the levy of fees, however, an assessee who has delayed the filing of the return of income even pertaining to the period prior to 1.06.2015, he can be absolved from such levy even though there is a continuous default on his part even after 1.6.2015. In our view, the AO has acquired the jurisdiction to levy the fees as on 1.06.2015 and therefore, any return filed and processed after 1.6.2015 will fall within his jurisdiction where on occurrence of any default on part of the assessee, he can levy fee so mandated u/s 234E of the Act. Therefore, irrespective of the period to to 262 & 285.286/Ind/2019 District Prosecution Officer which the quarterly return pertains, where the return is filed after 1.6.2015, the AO can levy fee under section 234E of the Act. At the same time, in terms of determining the period for which fees can be levied, only saving could be that for the period of delay falling prior to 1.06.2015, there could not be any levy of fees as the assumption of jurisdiction to levy such fees have been held by the Courts to be prospective in nature. However, where the delay continues beyond 1.06.2015. the AO is well within his jurisdiction to levy fees under section 234E for the period starting 1.06.2015 to the date of actual filing of the TDS return. In light of the same, in the instant case, the levy of fees under section 234E is upheld for the period 1.06.2015 to the date of actual filing of the TDS return which is 22.07.2015 and the balance fee so levied is hereby deleted. In the result, the ground of appeal is partly allowed.”
9. From perusal of the above decision we find that the issue before us is similar to the issue adjudicated by the Coordinate Bench and therefore respectfully following the decision of Coordinate Bench rendered on 23.01.2019 in the case of Shri Uttam Chand Gangwal (supra) are of the considered view that though levy of fee u/s 234E have been validly levied by the CPC which was confirmed by Ld. CIT(A) however the same should have been levied for the period commencing from 1.6.2015. We therefore direct the revenue authorities to make necessary verification in each of the case so as to look into the fact that in case if any fee u/s 234E is levied for the delay in filing return for the period before 01.06.2015, the same is directed to be deleted and the remaining fee levied for the default committed from 01.06.2015 onwards needs to be confirmed.”
From the discussion made herein above in light of decision of Coordinate Bench, Indore in the case of M/s. Office of The District Prosecution Vs. ACIT (supra), determining the period for which fees can be levied, only saving could be that for the period of delay falling prior to 1.06.2015 and the jurisdiction to levy fees u/s. 234E for the period starting 1.06.2015 to the date of actual filing of the TDS return which is 15.05.2016 in the instant case. In view thereof, we restore the issue raised in the instant appeals to the file of ld. Jurisdictional Assessing Officer (TDS) for the limited purpose of making verification in each of the case and in case if any fee u/s.234E is levied for the delay in filing return for the period prior to 01.06.2015, the same is directed to be deleted and the remaining fee levied for the default committed from 01.06.2015 onwards needs to be sustained. Accordingly, the grounds of appeal raised by the assessee in the instant batch of appeals are partly allowed for statistical purposes.
In the result, the appeals filed by the assessee are partly allowed for statistical purposes as per the terms indicated above.
Order pronounced on this 26th day of September, 2025.