Section 156 of the Income Tax Act
Income-tax Act, 2025: s.289
Section 156 of the Income-tax Act, 1961 corresponds to section 289 (Notice of demand) of the Income-tax Act, 2025.
Read section 289 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 156 is Fatehraj Singhvi v. UOI (73 Taxmann.com 252), cited in 1,778 of the 694 judgments on BharatTax that turn on this section.
Leading authorities on Section 156
Late fees under section 234E are not applicable for periods prior to June 1, 2015, as the amendment to section 200A inserting clause (c) was effective from that date.
The fee under Section 234E for late filing of TDS/TCS statements cannot be levied retrospectively by processing an intimation under Section 200A for defaults occurring before the amendment allowing such processing.
A fee under Section 234E cannot be levied or adjusted in an intimation under Section 200A for TDS statements pertaining to periods prior to June 1, 2015, as the enabling amendment to Section 200A(1)(c) came into effect only from that date.
Section 234E, levying late fees for delayed filing of TDS statements under section 200(3), is constitutionally valid and constitutes a compensatory fee, not a punitive penalty. Before treating any person as an assessee-in-default, an opportunity of being heard must be provided.
Late fees under section 234E can only be levied prospectively from June 1, 2015. Levying late fees for periods prior to this date is not permissible.
Penalty under Section 272A(1)(d) for non-compliance with a notice issued under Section 142(1) is not leviable when the assessee demonstrates a reasonable cause for such non-compliance. The decision defines what constitutes 'reasonable cause' in this context.
An employer is not in default under section 201 if they have made a bona fide estimate of employee income and deducted tax at source based on that estimate.
The validity of Section 234E of the Income Tax Act, 1961, inserted by the Finance Act, 2012, is examined by the court.
Section 234E creates a substantive liability to pay late fees for failure to deliver statements under section 200(3) within the prescribed time, effective from July 1, 2012, independent of the recovery mechanism under section 200A(1)(c).
The opportunity of hearing provided to an assessee must be real, effective, and realistic, not merely notional, and tax authorities are incumbent to decide cases on their merits after affording due opportunity.
