Appeal against Late Fee U/s 234e of Income Tax Act for Delayed Filing of TDS Returns more than 6 years later: ITAT dismisses Delay Petition [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai bench, while dismissing the petition for condonation for delay, held that the appeal filed by the assessee against late fees under Section 2344E of the Income Tax Act, 1961, for the late filing of Tax Deduction at Source return, was delayed by more than 6 years.

The assessee, Tamil Nadu Grama Bank Ulundurpet Branch, filed the appeal against the levy of late fees under section 23E of the Income Tax Act for late filing of TDS returns. However, the appeal was filed after 6 years. Hence, the bench dismissed the petition for condoning the delay.

Aggrieved by the order, the assessee filed an appeal before the tribunal.

During the proceedings, Pratik B. Sadrani, Counsel for the assessee, argued that the assessee is working in a faraway location. Branch by branch, the TDS compliances were initially managed separately. However, branches used to have a lot of trouble complying with TDS in a timely manner because of the complexity and increased compliance requirements. Also, the TIN Facilitation Centre where TDS statements were to be filed was far away from the branches, making it difficult to file returns on time. Further, due to the amalgamation of various banks with the assessee bank, it became difficult for the head office of the Bank to compile all previous data related to TDS returns, which led to delays in filing the appeals. Therefore, the letters were left unaddressed by the Bank on purpose because skilled specialists were unavailable in distant places, and people were unaware of the compliance requirements for Income Tax notices.

D. Hema Bhupal, Counsel for Revenue, submitted that there was inordinate delay in filing the appeal before the first appellate authority. The delay ranged between 2,175 days to 3,300 days, roughly translating into 6 to 9 years. Furthermore, the assessee is a regional rural bank with the assistance of experienced professionals who disregarded the Act’s many constraints on filing an appeal, as well as the statutory notices and orders from the assessing officer. The assessee’s actions demonstrated egregious negligence, which did not excuse the delay. Thus, the assessee could not provide sufficient or reasonable cause to justify the inordinate delay.

The Tribunal observed that difficulties in compliance, changes in concerned offices, or the fact that the TIN facilitation centre was far-off could not be a reasonable cause to justify such an inordinate delay.

After reviewing the facts and records, the two-member bench of Manoj Kumar Aggarwal (Accountant member) and Mahavir Singh (Vice president) dismissed the petition to condone the delay for filing an appeal against the levy of fees under Section 2344E of the Income Tax Act for the late filing of Tax Deduction at Source. Thus, the delay had occurred for more than 6 years, indicating gross negligence on the part of the assessee.

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