The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that late fees under Section 234E of the Income Tax Act, 1961 cannot be levied for period prior to 1.6.2015 for quarterly TDS returns.
The only issue to be decided in the appeal was to whether the CIT(A), NFAC was justified in confirming the rectification order passed by the AO u/s 154 of the Act by levying fees u/s 234E of the Act and consequentially interest u/s 220(2) of the Act in the facts and circumstances of the case.
The assessee, Vivek J Thar requested for waiver of late filing fees charged u/s 234E of the Act since the same was chargeable only for returns processed on or after 1.6.2015 for the returns filed pertaining to the period after 1.6.2015. However, the AO did not waive the late filing fees u/s 234E of the Act and passed the rectification order u/s 154 of the Act. Further interest u/s 220(2) of the Act was also levied for delayed payment of interest on late payment and interest u/s 234E of the Act.
The CIT(A), NFAC observed that the fee u/s 234E of the Act is required to be paid by the diductor at the time of submission of the TDS statements calculated at the rate of Rs 200/- per day for each day of default. There is no provision in the Act which allows for waiver from the payment of such fees. Accordingly, the CIT(A) upheld the levy of fees u/s 234E of the Act and consequential charging of interest u/s 220(2) of the Act for late payment of the said fees.
A Bench consisting of Kavitha Rajagopal, Judicial Member and M Balaganesh, Accountant Member observed that “We cancel the levy of late filing fees u/s 234E of the Act for both the quarters for both Form 24Q and 26Q TDS statements.”
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