Shrikrishna Laxminarayan Thakur Vs ITO (ITAT Pune)
In a significant decision for taxpayers facing penalties for delayed filing of Tax Deducted at Source (TDS) returns, the Income Tax Appellate Tribunal (ITAT), Pune bench, has ruled that the levy of late fees under Section 234E of the Income-tax Act, 1961, for returns processed prior to June 1, 2015, is not legally permissible. The Tribunal clarified that the amendment empowering the Central Processing Cell (CPC) to automatically levy such fees during the processing of TDS statements under Section 200A is prospective, applying only from that date.
The ruling came in a batch of 13 appeals filed by assessee Shrikrishna Laxminarayan Thakur, challenging orders from the National Faceless Appeal Centre (NFAC), Delhi. The appeals centered on the charging of late fees under Section 234E for delayed quarterly TDS returns pertaining to Assessment Years 2013-14, 2014-15, 2015-16, and 2016-17.
The common facts across these appeals were that the TDS returns for the quarters in question were filed after their respective due dates. When these returns were processed by the CPC under Section 200A of the Act, a fee under Section 234E was levied automatically. The assessee’s attempts to seek rectification under Section 154 to remove these late fees were unsuccessful, leading to appeals before the CIT(A), which were also dismissed, prompting the current appeals before the ITAT.
