Late Fee for Belated TDS Returns prior to 01.06.2015 invalid in absence of enabling Provision u/s 200A: ITAT [Read Order]
The tribunal ruled that the levy of late filing fees under Section 234E of the Income Tax Act for periods prior to June 1, 2015, was legally unsustainable because of the absence of enabling provision.
![Late Fee for Belated TDS Returns prior to 01.06.2015 invalid in absence of enabling Provision u/s 200A: ITAT [Read Order]](https://images.taxscan.in/h-upload/2025/12/31/2116123-late-fee-for-belated-tds-returns-itat-taxscan.jfif "Late Fee for Belated TDS Returns prior to 01.06.2015 invalid in absence of enabling Provision u/s 200A: ITAT [Read Order]")
The tribunal ruled that the levy of late filing fees under Section 234E of the Income Tax Act for periods prior to June 1, 2015, was legally unsustainable because of the absence of enabling provision. The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) held that in the absence of an enabling provision under Section 200A of the Act during those periods, the Assessing...
The tribunal ruled that the levy of late filing fees under Section 234E of the Income Tax Act for periods prior to June 1, 2015, was legally unsustainable because of the absence of enabling provision.
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) held that in the absence of an enabling provision under Section 200A of the Act during those periods, the Assessing Officer (AO) lacked the authority to compute or levy late fees while processing Tax Deducted at Source (TDS) statements.
Prakashchand (assessee), an individual engaged in the textile business, is a tax deductor who files quarterly TDS statements as required by law. On March 28, 2025, the TRACES (TDS-CPC) unit issued a rectification order under Section 154, levying a late filing fee of ₹23,800 under Section 234E for the third quarter of the 2013-14 financial year.
Aggrieved by the AO’s order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) dismissed the appeal. Aggrieved by this dismissal, the assessee filed appeals before the ITAT.
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The assessee contended that Section 200A(1)(c), which provides the machinery to compute fees under Section 234E, was only introduced with effect from June 1, 2015. The assessee further submitted that any levy for periods prior to this date amounts to an impermissible retrospective application of fiscal law.
The two-member bench, comprising Manu Kumar Giri (Judicial Member) and S.R. Raghunatha (Accountant Member), observed that while Section 234E was introduced on July 1, 2012, the power to compute this fee while processing TDS returns under Section 200A was not granted until June 1, 2015.
The tribunal observed that prior to June 1, 2015, there was no statutory mechanism available for the Department to determine or impose late fees during the processing of TDS statements and also observed that the amendment to Section 200A is prospective in nature and cannot be used to justify fees for earlier assessment years.
The bench relied on precedents from the Madras High Court, specifically the cases of M/s. Sri Rujula International and M/s. True Blue Voice India Private Limited, which established that such levies were invalid for the period in question.
It was concluded that the late fees charged for the financial years 2013-14 and 2014-15 were without legal authority. The tribunal set aside the orders of the lower authorities and directed the Assessing Officer to delete the late fees charged under Section 234E in the relevant intimations. The appeals of the assessee were allowed.
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