Bhikhabhai Hirabhai Patel Vs DCIT (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has partially allowed an appeal by Bhikhabhai Hirabhai Patel, reducing the late filing fees imposed on him for a tax-deduction-at-source (TDS) default. The judgment addresses two key legal issues: the applicability of late fees under Section 234E and the interpretation of the TDS provisions for immovable property transfers under Section 194IA.
The case arose from a TDS liability of Rs. 4,39,245 imposed on Patel for the financial year 2013-14, which was upheld by the Commissioner of Income Tax (Appeals). Patel challenged this, arguing that Section 200A, the provision for processing statements of tax deduction, did not provide a mechanism for computing late fees under Section 234E for the period before June 1, 2015. He contended that Section 234E, being a charging provision, could not be enforced without a corresponding regulatory provision in Section 200A.
However, the ITAT dismissed this argument, citing a precedent from the Hon’ble Gujarat High Court in the case of Rajesh Kourani vs. Union of India. In this judicial precedent, the High Court had ruled that Section 234E is a charging provision and that fees could be levied even without a specific regulatory mechanism in Section 200A for the period in question. The ITAT, therefore, concluded that this issue was “no longer res integra” (a matter of settled law) and upheld the initial imposition of late fees on the principal amount.
