ITAT waives Late Fee u/s 234E of Income Tax Act, allows Appeal considering Technical Error [Read Order]

The Jodhpur bench of the Income Tax Appellate Tribunal (ITAT) granted the assessee’s appeal, acknowledging that the delay in filing the TDS return was due to a technical issue rather than negligence.

The assessee, a recognised provident fund, deposited TDS to the central government account and filed TDS Return in Form 24Q. Later on, it was comes to knowledge to assessee that the data of same deduction has to file in Form No. 26Q hence immediately trust made efforts to file correction statement.

However, due to technical reasons the Traces Portal had not allowed the assessee to make correction in Form 240 and also not permitted to replace the data in Form No 26Q directly through correction statement.

Therefore, assessee trust compelled to file return in another Form 26Q and the same Form was processed u/s 200A of the Income Tax Act 1961 by the Central Processing Cell of TDS treated the same return as a new return.

Accordingly, the Central Processing Cell of TDS has imposed late fee of Rs. 96,800/- considering the delay of 484 days ignoring the facts of the case. The intimation of demand in this regard was received to assessee on 14.07.2021 from the jurisdiction assessing officer.

Ashok Somani, representing the assessee relied upon the decision of the Tribunal in the case of GB Builders v. ACIT and pointed out that, considering the facts that no loss is caused to the revenue, the assessee cannot be saddled with levy of late filing under Section 234E of the Income Tax Act, taking a judicious view of the matter.

He further argued that the Supreme Court’s order extending the limitation period due to COVID-19 should be followed, making their appeal timely.

Therefore, the two-member bench of Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbai (Accountant Member) acknowledged the technical error and took into account that the delay did not cause any loss as the TDS was ultimately lodged.

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