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Kodaganallur Parthasarathy Pichumani Vs ITO (ITAT Chennai)
In Kodaganallur Parthasarathy Pichumani v. ITO (TDS), ITA Nos. 3559–3561/Chny/2026, AYs 2013-14 to 2015-16, order dated 20.08.2026, the Chennai ITAT considered the levy of late fee under Section 234E while processing belated quarterly TDS statements under Section 200A.
The assessee, an individual engaged in providing health care services, had filed quarterly TDS statements belatedly for assessment years 2013-14, 2014-15 and 2015-16. The statements were processed by CPC under Section 200A and late fee under Section 234E was levied. After the assessee filed rectified TDS statements, CPC again levied the same late fee through rectification orders under Section 154 read with Section 200A. The First Appellate Authority upheld the levy.
Before the Tribunal, the assessee contended that, prior to 01.06.2015, Section 200A did not contain an enabling machinery provision for levy of fee under Section 234E while processing TDS statements. The assessee relied upon the jurisdictional Madras High Court decisions in True Blue Voice India (P.) Ltd. v. Chief Commissioner of Income-tax, TDS, Lingeswara Creations v. Principal Chief Commissioner of Income-tax and Sri Rujula International v. Principal Chief Commissioner of Income-tax.
The Tribunal noted that Section 234E had been introduced with effect from 01.07.2012, whereas the provision in Section 200A(1)(c) enabling computation of the Section 234E fee while processing TDS statements was inserted by the Finance Act, 2015 with effect from 01.06.2015. Following the binding Madras High Court precedent and coordinate-bench decisions, the Tribunal held that the levy of late fee under Section 234E in respect of TDS statements pertaining to the period prior to 01.06.2015 was invalid and liable to be deleted.
Accordingly, the Chennai ITAT directed the Assessing Officer to delete the levy of late fee under Section 234E and held that the appeals filed by the assessee were allowed. The order was pronounced in the open court on 20th August 2026 at Chennai.
List of Cases Discussed / Relied Upon
- True Blue Voice India (P.) Ltd. v. Chief Commissioner of Income-tax, TDS, [2025] 472 ITR 480 (Mad.) — Madras High Court precedent relied upon for the proposition that, prior to 01.06.2015, Section 200A did not contain an enabling provision for levy of Section 234E fee while processing TDS statements.
- Lingeswara Creations v. Principal Chief Commissioner of Income-tax, [2024] 168 taxmann.com 383 (Mad.) — Madras High Court decision relied upon regarding the absence of machinery under Section 200A for levy of Section 234E fee prior to 01.06.2015.
- Sri Rujula International v. Principal Chief Commissioner of Income-tax, [2024] 167 taxmann.com 367 (Mad.) — Madras High Court precedent followed on the invalidity of Section 234E fee levied through Section 200A processing for the period before 01.06.2015; the material also refers to the writ petition decision dated 12.09.2024.
- Shivsu Pielkenrood Watek Ltd., ITA No.1250/CHNY/2026, order dated 18.05.2026 — Chennai ITAT decision on identical facts, which followed Paul System Technologies Pvt. Ltd. and the Madras High Court precedent and deleted the levy of Section 234E late fee.
- Paul System Technologies Pvt. Ltd., ITA Nos.59 to 67/Chny/2026, order dated 10.04.2026 — Chennai ITAT coordinate-bench decision holding that Section 234E late fee could not be levied through Section 200A processing for TDS statements pertaining to the period prior to 01.06.2015.
- Gopuram Enterprises Private Limited vs. ACIT, ITA No.1002-1007/Chny/2024, order dated 26.06.2024 — Chennai ITAT decision following the Madras High Court precedent and holding that Section 234E late fee could not be levied through Section 200A for the relevant pre-01.06.2015 period.
- M/s.M.F.Textiles Pvt.Ltd. Vs. ACIT, ITA Nos.578 & 579/Chny/2021, order dated 24.02.2022 — Chennai ITAT decision holding that, in the absence of an enabling provision under Section 200A, the Assessing Officer could not levy Section 234E late fee for belated quarterly TDS returns relating to the period prior to 01.06.2015.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These appeals filed by the assessee are directed against the orders of Addl./JCIT(A)-2, Jaipur all dated 12.05.2026 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The orders of First Appellate Authority (FAA) arise out of the orders of the AO levying late fee u/s.234E of the Act. The relevant Assessment Years are 2013-14, 2014-15 & 2015-16.
2. Brief facts of the case are as follows: The assessee is an individual engaged in the business of providing health care services. For the assessment years 2013-14 to 2015-16, assessee had filed the quarterly TDS statements belatedly. The TDS statements were processed by the CPC u/s.200A of the Act and late fee u/s.234E of the Act was levied. Subsequently, the assessee filed rectified TDS statements. The CPC, vide rectification orders passed u/s.154 r.w.s.200A of the Act, once again levied the same late fee u/s.234E as had been levied in the original orders passed u/s.200A of the Act.
3. Aggrieved by the orders passed u/s.154 r.w.s.200A of the Act, assessee filed appeals before the First Appellate Authority (FAA). The FAA dismissed the appeals and upheld the orders of the AO/CPC levying late fee u/s.234E of the Act for the belated filing of the quarterly TDS statements.
4. Aggrieved, the assessee has filed the present appeals before the Tribunal. Before us, none appeared on behalf of the assessee. However, in the grounds of appeal the assessee has contended that prior to the amendment to section 200A of the Act by the Finance Act, 2015, with effect from 01.06.2015, there was no enabling machinery provision for levy of fee u/s.234E while processing the TDS statement. Hence, in the absence of a corresponding machinery provision, the fee could not have been levied through an intimation issued u/s.200A of the Act. The assessee placed reliance on the decisions of the Hon’ble jurisdictional Madras High Court in the case of True Blue Voice India (P.) Ltd. v. Chief Commissioner of Income-tax, TDS [2025] 472 ITR 480 (Mad.), Lingeswara Creations v. Principal Chief Commissioner of Income-tax [2024] 168 taxmann.com 383 (Mad.) and Sri Rujula International v. Principal Chief Commissioner of Income-tax [2024] 167 taxmann.com 367 (Mad.).
5. The Ld.DR relied on the orders of the FAA.
6. We have heard the Ld. DR and perused the material available on record. We find that on identical facts, the Tribunal in the case of Shivsu Pielkenrood Watek Ltd., in ITA Nos.1250/CHNY/2026 (order dated 18.05.2026) following its earlier decision in the case of Paul System Technologies Pvt. Ltd. (ITA Nos.59 to 67/Chny/2026, order dated 10.04.2026), which in turn followed the judgment of the Hon’ble Madras High Court in the case of True Blue Voice India Pvt. Ltd. vs. CCIT, supra deleted the levy of late fee u/s.234E of the Act.
The relevant findings of the Tribunal read as follows:-
“5. On merits we notice that the coordinate bench in an identical situation in the case of Paul System Technologies Private Limited vs ITO (ITA Nos.59 to 67/CHNY/2026 dated 10.04.2026) has held that –
10. We have heard the case, perused the materials on record,and gone through orders of the authorities below. The issues arising in the present bunch of appeals are twofold, viz., (i) whether the delay in filing the appeals before the ld. CIT(A) deserves to be condoned, and (ii) whether the levy of late fees under section 234E of the Act in the facts of the present case is sustainable in law.
At the outset, it is noticed that the ld. CIT(A) has dismissed all the nine appeals in limine on account of inordinate delay ranging from 8 to 10 years, without adjudicating the issue on merits. The assessee has placed on record the reasons for such delay in Form No. 35, stating that the intimations issued under section 200A of the Act were not brought to its notice, as the TDS compliances were handled by an external consultant, and the management became aware of the impugned demands only upon receipt of recovery notices from the jurisdictional TDS Assessing Officer. Immediately thereafter, the assessee took steps to file the appeals.
11. Considering the explanation furnished, we find that the delay has occurred due to bonafide reasons and circumstances beyond the control of the assessee. It is a settled proposition of law that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the ld. CIT(A) has not examined the explanation for delay in a judicious and liberal manner. Therefore, in the interest of justice, we are inclined to condone the delay in filing all the appeals before the ld. CIT(A).
12. Having condoned the delay, we now proceed to examine the issue on merits. The undisputed facts are that the late fees under section 234E of the Act have been levied while processing the TDS statements under section 200A of the Act for the relevant assessment years. It is also not in dispute that the TDS returns pertaining to F.Y. 2014-15 and part of F.Y. 2015-16 relate to the period prior to 01.06.2015, i.e., before the amendment enabling levy of fee under section 234E through processing under section 200A came into effect.
13. It is by now well settled by various judicial precedents, including the decisions of the Hon’ble jurisdictional High Courts and coordinate benches of the Tribunal, that prior to 01.06.2015, there was no enabling provision under section 200A of the Act to levy fees under section 234E while processing TDS statements. Therefore, any such levy for the period prior to 01.06.2015 is not sustainable in law. Our view is supported by the Hon’ble jurisdictional Madras High Court decision M/s.Sri Rujula International vs. PCIT (WP Nos. 4307 of 2024, WMP Nos.4619 & 4621 of 2024) dated 12.09.2024 by following the earlier decisions of the Hon’ble High Court in the case of 2023(10) TMI 1141 [M/s.True Blue Voice India Private Limited vs. Chief CIT, TDS [2024] 158 taxmann.com 67 (Madras) held as under:-
“4. In the present case, the respondent had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015. Therefore, in the absence of any provisions under Section 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside.
5. Accordingly, the impugned demand Intimation Letters dated 28.03.2019 are set aside and the Writ Petition stands disposed of. No costs.”
14. Further, we note that the issue is already covered by the decision of the coordinate bench of the tribunal in the case of Gopuram Enterprises Private Limited vs. ACIT, ITA No.1002-1007/Chny/2024 dated 26.06.2024 by holding 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;”
12. 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.”
13. 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.
14. Now the dispute is with regard to the assessment years 2012- 13, 2013-14, 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.
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.
16. 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.
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, 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 ITA Nos. 578 & 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.
7. In the result, all six these appeals filed by the assessee are allowed.
15. Respectfully following the binding judicial precedents relied upon by the ld.AR, we hold that the levy of late fees u/s.234E of the Act in respect of TDS statements pertaining to the period prior to 01.06.2015 is invalid and liable to be deleted. Accordingly, the eight (8) appeals for A.Ys. 2014-15 and 2015-16 and corresponding demands raised u/s.234E of the Act as detailed beloware hereby deleted.
6. It can be seen that the quarterly returns under dispute in the present appeals pertain to period prior to 01.06.2015 and therefore respectfully following the judicial precedence, we hold that the levy of late fees u/s.234E of the Act in respect of TDS statements pertaining to the period prior to 01.06.2015 is invalid and liable to be deleted.”
7. In light of the above judicial pronouncement, we hold that levy of late fees u/s.234E of the Act in respect of TDS statements be deleted. Accordingly, we direct the AO to delete the levy of late fee u/s.234E of the Act. It is ordered accordingly.
8. In the result, the appeals filed by the assessee are allowed.
Order pronounced in the open court on 20th August,2026 at Chennai.
