The Chandigarh bench of the Income Tax Appellate Tribunal (ITAT), has held that the filing of TDS Statement in form would constitute a mere inadvertent error and the department cannot impose late fee under section 234E of the Income Tax Act, 1961 in such cases.
The assessee, Mr. Gurpreet Singh, is engaged in the business of architecture. The assessee purchased a property for which TDS was deducted. The assessee filed the TDS statement in Form 26QB on 07.12.2015, instead of in Form 27Q. On coming to knowledge that the deductee was not getting full credit of the TDS deposited, the assessee had made request for refund of TDS on 21.01.2020, which was refunded on 22.12.2020, and the assessee again deposited the same on 29.12.2020 and filed the TDS Return on 11.01.2021 in Form 27Q, as applicable. The CPC, TDS imposed the interest on late payment of Rs.4,95,112/- and late filing fees u/s 234E at Rs.3,64,600/-.
The assessee contended that the mistake was bonafide. However, the department was of the view that the levy of late fee u/s 234AE of the Act is mandatory and consequential and so, it cannot be deleted on the ground of reasonable cause.
A bench of A.D. Jain, Vice President & Shri Vikram Singh Yadav, Accountant Member observed that “there cannot be any denial that where the lapse came about due to a mere technical error, like the one in the present case, i.e., inadvertent wrong filing of TDS Statement, i.e., in Form No. 26QB, rather than in the applicable Form No. 27Q, there is no case for levy of late filing fee u/s 234E of the Act.”
Ruling in favor of the assessee, the Tribunal held that “It is only l that it was due to inadvertent error that the TDS statement was filed in the wrong Form. Had it not been so, there would not have been any question of levy of interest u/s 234E of the Act, which was deleted by the Ld. CIT(A) himself.”
Relying on the decision in M/s G.B Builders Vs. ACIT, the Tribunal held a mere technical inadvertent error did not invite levy of late filing fee u/s 234E of the Act.
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