Mere Late Filing of Form 27Q Cannot be Criteria for Levying Fees u/S 234E: ITAT [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that mere late filing of Form 27Q could not be considered as the criteria for levying fees under Section 234E of the Income Tax Act 1961.

The assessee,Kanta Govind Singh, was a resident senior citizen aged 85 years. During the year under consideration the assessee purchased a house property which was jointly co-owned by Vipul Taneja and Aparajita Bhalla.

Both the co-owners of the house property were non-residents in India during the year under consideration and thus the assessee deducted tax at source on the sale consideration as per provision of Section 195 of the Income Tax Act, 1961 and they received lower tax certificate specifying TDS rate at 2.38% on the sale consideration amount of the house property as referred earlier.

Accordingly on the date of payment/credit of sale consideration on 20.06.2019 the assessee deducted TDS of 2.85% on total sale consideration. Thereafter, the assessee deposited the total TDS amount to the account of the Central Government on the same day 20.06.19 without any delay though the due date for payment of TDS was 07.07.2019.

 Due to very old age, the assessee on account of human error forgot to file the TDS return in Form 27Q by the end of the month following the quarter in which TDS was deducted. He accordingly arranged to file the said return. The return filed in Form 27Q was processed by the Assessing Officer and intimation dated under Section 200A of the Income Tax Act was issued after levying of late filing fees as per section 234E of the Income Tax Act.

Sanjay R. Shah, on behalf of the assessee submitted that the procedural error in filing the TDS return was just on account of human error due to old age and with no malafide intention of being non-co-operative to income tax compliances.

He further submitted that the non-resident sellers of the property duly received credit of the tax amount without any error or omission and the AO ought not to have levied such a heavy late filing fees only on account of procedural error of filing the prescribed form in a situation when there was no loss to revenue either on account of tax or interest.

Dileep Kumar, on behalf of the revenue submitted that Section 234E of the Income Tax Act provided mandatory filing TDS statement and, therefore it was right in confirming the levy of fee under section 234E of the Income Tax Act.

The two-member Bench of Annapurna Gupta, (Accountant Member) and Suchitra Kamble, (Judicial Member) observed that the assessee being senior citizen had deposited TDS amount immediately after sale consideration was received and no lapse was on the part of the assessee while depositing the TDS amount to the Treasury of Government of India.

The assessee could not file form 27Q within the time frame, Due to the circumstances but the assessee’s intention was clear as the assessee filed the same in January 2021.

The Bench allowed the appeal and deleted the penalty holding that the assessee had not filed Form 27Q on 31.07.2019 and thus late filing could not be the criteria for levying fees under Section 234E of the Income Tax Act.

To Read the full text of the Order CLICK HERE

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