S. 234E TDS Late Fee Levy Prospective: ITAT Restores Appeal for Fresh Adjudication Subject to Payment of 10k Cost [Read Order]
Observing that the CIT(A) had not decided the issue on merit, the Tribunal restored the matter for fresh adjudication subject to the payment of a cost of ₹10,000/- to the Tamil Nadu State Legal Services Authority.
![S. 234E TDS Late Fee Levy Prospective: ITAT Restores Appeal for Fresh Adjudication Subject to Payment of 10k Cost [Read Order]](https://images.taxscan.in/h-upload/2025/10/29/2100712-tds-late-fee-levy-prospective-itat-appeal-payment-taxscan.webp "S. 234E TDS Late Fee Levy Prospective: ITAT Restores Appeal for Fresh Adjudication Subject to Payment of 10k Cost [Read Order]")
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) restored the appeal for fresh adjudication by the Commissioner of Income Tax (Appeals) [CIT(A)] for TDS late fee issue subject to payment of 10k cost.
MLS Enterprises Private Limited (assessee) a company engaged in the business of manufacturing boilers and providing fabrication services, for whom the department levied of a TDS demand amounting to ₹2,61,600/- under Section 234E of the Income Tax Act, 1961, which was levied under Section 200A of the Act due to the belated filing of TDS returns.
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Aggrieved by the AO’s order, the assessee filed appeal before the CIT(A). The CIT(A) upheld the AO’s order. Further the assessee appealed against the CIT(A)’s order before the ITAT.
The assessee argued that the intimation order passed under Section 200A was erroneous because there was no enabling provision under Section 200A for the levy of the penalty under Section 234E prior to 01/06/2015.
Read More: DIN Absence: ITAT Remands Matter for Reconsideration [ReadOrder]
The assessee contended that the amendment to Section 200A via the Finance Act, 2015, which provided for this levy, is prospective and cannot be applied retrospectively.
The two-member bench, comprising SS Viswanethra Ravi (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member), noted that the CIT(A) had dismissed the appeal for statistical purposes and had not decided the issue on merit.
In the interest of justice, the Tribunal restored the matter back to the file of the CIT(A) to decide the issue afresh. The tribunal restored the matter subject to the payment of a cost of ₹10,000 paid to the Tamil Nadu State Legal Services Authority at the High Court of Madras within 30 days of the receipt of the order.
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The tribunal directed the assessee to furnish the proof of payment before the CIT(A). The tribunal also directed the CIT(A) to proceed to hear the appeal on merits. In the result, the appeal filed by the assessee was allowed for statistical purposes.
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