Section 234E late fee is not always mandatory and can be waived

Kanta Govind Singh Vs ACIT CPC TDS (ITAT Ahmedabad)

Assessee, aged 85 years, purchased property from non-residents joint owners. TDS was deducted u/s 195 at lower rates as the sellers obtained lower tax certificates. Sale consideration was paid on 20.06.19 & TDS was also paid on the same day though assessee could have paid the TDS latest by 07.07.2.019.

Due to very old age, the assessee on account of human error forgot to file the TDS return (Form 27Q) on or before 31.07.2019. Due to weak health and thereafter on account of outbreak of Covid-19, the assessee got to know that the TDS return was not filed and accordingly arranged to file the TDS return on 08.01.2021. Form 27Q was processed by the AO TRACES and intimation u/s 200A was issued after levying of late filing fees of Rs.1,05,400/- as per section 234E.

On appeal, CIT(A) dismissed the appeal of the assessee.

On further appeal before the Tribunal, assessee submitted that the procedural error in filing the TGDS return is just on account of human error due to old age and with no malafide intention of being non co- operative to income tax compliances. Assessee had deposited the tax amount to the account of the Central Government on the date of deducting the tax itself without keeping the tax amount with the assessee even for a single day and also much in advance from the due date of depositing the tax. AO ought not to have levied such a heavy late filing fees only on account of procedural error of filing the prescribed form in a situation when there is no loss to revenue either on account of tax or interest.

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