Late Fee Levy u/s 234E for TDS Returns Prior to June 2015 Invalid: ITAT [Read Order]
The tribunal ruled that the levy of late fees under Section 234E of the Income Tax Act for delayed filing of TDS returns prior to June 1, 2015, is invalid as there was no provision prior to the date.
![Late Fee Levy u/s 234E for TDS Returns Prior to June 2015 Invalid: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/TDS-Returns.jpg "Late Fee Levy u/s 234E for TDS Returns Prior to June 2015 Invalid: ITAT [Read Order]")
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) deleted the late fees imposed under Section 234E of the Income Tax Act, 1961, for the delayed filing of quarterly Tax Deducted at Source (TDS) returns prior to June 2015. Ram Refrigeration & Electronics Pvt. Ltd., (assessee) a private limited company filed against the orders of the Commissioner of Income Tax...
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) deleted the late fees imposed under Section 234E of the Income Tax Act, 1961, for the delayed filing of quarterly Tax Deducted at Source (TDS) returns prior to June 2015.
Ram Refrigeration & Electronics Pvt. Ltd., (assessee) a private limited company filed against the orders of the Commissioner of Income Tax (Appeals)[CIT(A)], which upheld the levy of late fees under Section 234E for belated TDS returns processed by the Centralized Processing Centre (CPC).
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The Assessing Officer (AO) had imposed late fees under Section 234E, along with consequential interest under Section 220(2), for the delayed filing of quarterly TDS returns for FY 2012-13. The assessee filed rectification applications under Section 154, arguing that the levy was invalid based on judicial precedents.
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The rectification applications were rejected. Aggrieved by the order of AO, the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeals. Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT.
The assessee’s counsel argued that the TDS returns for FY 2012-13 were filed and processed before June 1, 2015. The Counsel contended that prior to the amendment in Section 200A(1)(c) by the Finance Act, 2015, there was no provision to levy late fees under Section 234E for returns processed under Section 200A.
The counsel relied on a recent ITAT decision in Pancharatna Buildcon Pvt. Ltd. vs. ITO where a similar issue was decided in favor of the assessee.
The two-member bench comprising Dr. Manish Borad (Accountant Member) and Vinay Bhamore (Judicial Member) observed that the facts of the case were identical to those in the case of Pancharatna Buildcon Pvt. Ltd.
The tribunal observed that Section 200A(1)(c), which enables the levy of late fees under Section 234E, was introduced with effect from June 1, 2015. The tribunal observed that no late fees could be imposed for TDS returns processed prior to that date.
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The tribunal further referenced judicial precedents, including decisions by the Kerala High Court in Olari Little Flower Kuries Pvt. Ltd. vs. Union of India and Jiji Varghese vs. ITO, which affirmed that late fees under Section 234E cannot be levied for periods prior to June 1, 2015.
The tribunal held that the levy of late fees under Section 234E for FY 2012-13 was legally unsustainable. The tribunal set aside the CIT(A)’s orders and directed the AO to delete the late fees and the consequential interest under Section 220(2) of the Income Tax Act. The appeals of the assessee were allowed.
To Read the full text of the Order CLICK HERE
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