Tribunal overturns late filing fee decision, citing technical error and lack of revenue loss

The Tribunal ruled in favor of the assessee, overturning the decision to impose late filing fees under section 234E of the Income Tax Act, 1961. The Tribunal considered the technical and inadvertent nature of the error, noting that no loss was incurred by the Revenue and the assessee's intention was not to evade payment. Emphasizing precedents and the lack of justification for the late filing fee in this scenario, the Tribunal accepted the grounds of appeal and allowed the appeal.

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Issues:
Late filing fee under section 234E of the Income Tax Act, 1961.

Analysis:
The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) confirming the charging of late filing fee of Rs. 3,64,600/- under section 234E for the late filing of TDS statement in Form No. 27Q for the assessment year 2016-17. The assessee had initially filed the TDS statement in Form 26QB instead of Form 27Q, leading to the imposition of late filing fee.

The facts revealed that the assessee, engaged in the business of architecture, purchased a property and deducted TDS at the prescribed rate, deposited it, and filed the TDS statement in Form 26QB instead of Form 27Q. Upon realizing the mistake, the assessee requested a refund, redeposited the TDS, and filed the correct TDS return. The Income Tax Department imposed late filing fees under section 234E.

The Ld. CIT(A) deleted the imposition of interest on late payment but upheld the late filing fee. The assessee contended that the late filing was due to inadvertent error and technical mistake, citing similar cases where late filing fees were not levied for such errors. The Ld. CIT(A) relied on legal precedents to justify the late filing fee, emphasizing that section 234E is mandatory and not punitive in nature.

The Tribunal considered the circumstances and legal positions presented by both parties. It acknowledged the mandatory nature of late filing fees under section 234E but highlighted that the error in this case was technical and inadvertent. The Tribunal noted that no loss was caused to the Revenue, and the intention of the assessee was not to evade payment. Relying on previous judgments, the Tribunal concluded that the mere technical error did not warrant the levy of late filing fees under section 234E.

In light of the arguments and precedents, the Tribunal accepted the grounds of appeal raised by the assessee, reversing the order under appeal and allowing the appeal. The Tribunal found merit in the grievance raised by the assessee and concluded that the late filing fee under section 234E was not justified in this case.

In conclusion, the Tribunal ruled in favor of the assessee, emphasizing that a technical inadvertent error in filing the TDS statement did not warrant the imposition of late filing fees under section 234E of the Income Tax Act, 1961.

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