Dr. Khande Hospital Vs Pune ITO (ITAT Pune)
In the case of Dr. Khanade Hospital vs. ITO-1, Pune (ITA No. 452/PUN/2024), the assessee challenged the levy of a late fee under Section 234E of the Income-tax Act for the delay in filing a TDS return related to the third quarter of the financial year 2012–13. The return was filed on 06.03.2013, and the core contention was that Section 234E, which imposes a fee for late filing of TDS returns, could not be applied retrospectively for periods before 01.06.2015. The CIT(A) had upheld the late fee based on the Gujarat High Court’s decision in Rajesh Kourani, which allowed retrospective application of the section. However, the Tribunal observed that other High Courts—including Karnataka and Kerala—have taken a different view, stating that such levies for periods prior to June 2015 are not legally valid.
The ITAT Pune, noting the absence of a binding precedent from the jurisdictional High Court, referred to the Supreme Court’s ruling in CIT vs. Vegetable Products Ltd., which advises that in case of divergent judicial opinions, the view favorable to the assessee should prevail. Following this principle and relying on the Karnataka High Court’s decision in Fatheraj Singhvi and the Kerala High Court’s ruling in Olari Little Flower Kuries, the Tribunal held that the late fee under Section 234E for returns filed prior to 01.06.2015 is without legal backing. Consequently, it quashed the late fee levied on Dr. Khanade Hospital for AY 2013–14 and directed the deletion of the fee.
