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The power to charge fees under the provisions of section 234E of the Act while processing the TDS statements, was dwelled upon by the Legislature by way of insertion of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. Accordingly, we hold that where the Assessing Officer has processed the TDS statements filed by the deductor, which admittedly, were filed belatedly but before insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015, then in such cases, the Assessing Officer is not empowered to charge fees under section 234E of the Act while processing the TDS returns filed by the deductor.
Thus, post 1st June 2015, in the course of processing of a TDS statement and issuance of intimation u/s 200A in respect thereof, an adjustment could also be made in respect of the ‘fee’, if any, shall be computed in accordance with the provisions of section 234E. Prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees u/s 234E of the Act.
HC held that since before 01.06.2015 section 234E providing for late fee for delay filling of TDS returns was not linked to / not referred under Sec 200A processing of TDS returns. As a result of this the late fee charge was invalid and illegal.
When the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015.
The Board is examining the desirability and expediency of prescribing situation/circumstances under which levy of fee under Section 234E may cause genuine hardship to the taxpayers, so as to prescribe guidelines for waiver of such fees by virtue of the powers of the Board under Section 119(2)(a) of the Income-tax Act, 1961.
RECOMMENDATION FOR REDUCING THE FEE UNDER SECTION 234E FOR DEFAULT IN FURNISHING STATEMENTS OF TDS AND TCS FROM RS.200/- PER DAY TO RS.100/- PER DAY The levy of mandatory fee u/s. 234E at the rate of Rs.200/- per day for default in furnishing of Statements of TDS u/s. 200(3) and TCS u/s. 206C(3) has been […]
In this case the constitutional validity of section 234E of the Act was challenged. Hon’ble HC has followed the decision of Hon’ble Bombay HC in the matter of Rashmikant Kundalia and ors. V/s Union of India & ors. (2015) 229 Taxman 596 (Bom) where the Hon’ble court has upheld the validity of Section 234E of the Income Tax Act
In other words, before 01.06.2015, the assessing authority could pass a separate order under Section 234E levying fee for delay in filing the statement under Section 200(3) of the Act. However, after 01.06.2015, the assessing authority is well within his limit to levy fee under Section 234E of the Act even while processing the statement under Section 200A and making adjustment.
G. Indhirani Vs. DCIT (ITAT Chennai) The only issue arises for consideration is with regard to levy of fee under Section 234E of the Income-tax Act, 1961 while processing the statement furnished by the assessees under Section 200A of the Act which was held as unsustainable
The Hon’ble Amritsar bench has given a landmark judgement on the issue of 234E Fee levied prior to June,2015 in the case of Sibia Healthcare Private Limited v./s Dy. Commissioner of Income-tax (TDS), in I.T.A. No.90/Asr/2015 and has deleted the addition-
