Kerala HC quashes Demand of Late Fee payment u/s 234 E of Income Tax Act Citing Bereft of Jurisdiction [Read Order]
Since in matters where total lack of jurisdiction is alleged, delay cannot be relied upon as a ground to deny the relief
![Kerala HC quashes Demand of Late Fee payment u/s 234 E of Income Tax Act Citing Bereft of Jurisdiction [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Kerala-HC-Kerala-HC-Quashes-Kerala-HC-Quashes-Demand-of-Late-Fee-payment-taxscan.jpg "Kerala HC quashes Demand of Late Fee payment u/s 234 E of Income Tax Act Citing Bereft of Jurisdiction [Read Order]")
In a recent case, the Kerala High Court quashed the demand of late fee payment under section 234 E of the Income Tax Act, 1961 as the demand in intimations for the period from 2012-13 is bereft of authority and cannot be legally sustainable. As an assessee under the Income Tax Act, 1961,Vanchinad Forgings (P) Ltd, the petitioner had deducted TDS for payments made by him and remitted the...
In a recent case, the Kerala High Court quashed the demand of late fee payment under section 234 E of the Income Tax Act, 1961 as the demand in intimations for the period from 2012-13 is bereft of authority and cannot be legally sustainable.
As an assessee under the Income Tax Act, 1961,Vanchinad Forgings (P) Ltd, the petitioner had deducted TDS for payments made by him and remitted the same to the Income Tax Department. While filing the statement of returns regarding the remittance of TDS, delay occurred. When the returns were processed, the second respondent, on noticing the delay in filing the statement of TDS remittance, levied late fee under section 234E of the Act. By intimations, petitioner was called upon to pay the late filing fee under section 234E of the Income Tax Act, 1961 ('the Act').
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As per the aforesaid intimations, amounts have been demanded as late fee for the periods from 2012-13 onwards on the basis of the provisions in section 234E of the Act. According to the petitioner, though section 234E of the Act was introduced by the Finance Act, 2012 with effect from 1st July, 2012, since petitioner is being demanded to pay, late fee for not filing the statement of tax deduction at source, it is necessary to refer to section 200A of the Act.
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It was further submitted that Section 200A(1) incorporated clause (c) only with effect from 01.06.2015. Subclause (c) to section 200A (1) refers to the fee if any to be computed in accordance with the provisions of section 200A(1)(e). It is the claim of the petitioner that till 01.06.2015 petitioner cannot be mulcted with any liability to pay late fee for non filing of any statement of tax deduction at source.
Considering the long delay in challenging the intimation, the respondent objected the garant of relief sought by petitioner. Sri.P.Padmanathan K. V. , counsel for the petitioner, Sri.P.G.Jayashankar, the Senior Standing Counsel as well as Sri.G.Keerthivas, the Junior Standing Counsel for the respondents.
In the decision in M/s.SaraIa Memorial Hospital v. Union of India and Another an identical question arose for consideration. After considering the statutory provisions of section 234E and section 200A of the Act and the implications of the amendment brought in the Act, it was held that the amendment would take effect only from 1st June, 2015 and is thus prospective in nature. The aforesaid judgment has become final and is binding upon the authorities. Thus the jurisdiction to levy late fee under section 234E arises only from 01-06.2015 and not earlier.
As regards the contention on delay, it can be seen that the nature of challenge raised by the petitioner is based upon the lack of jurisdiction of the respondents to impose late fee. Since in matters where total lack of jurisdiction is alleged, delay cannot be relied upon as a ground to deny the relief, the bench of Justice Bechu Kurian Thomas found that the objections of the respondents are without any basis.
Further the decisions cited are distinguishable on the facts of those cases itself. In the decision in Digambar's case, the delay of 20 years in approaching the High Court for grant of compensation for alleged utilization of the land was held as a decisive factor to disentitle the petitioner therein.
In view of the above, the demand in intimations for the period from 2012-13 is bereft of authority and cannot be legally sustainable. The single bench quashed the intimations to the extent it demand late fee under section 234E for the period from 2012-13.
To Read the full text of the Order CLICK HERE
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