Tribunal upholds late fee for TDS statement delay, rejects COVID-19 extension plea

The Tribunal upheld the levy of a late fee of Rs. 30,600 under section 234E of the Act, dismissing the appellant's appeal. The CIT (A) affirmed that the late fee is mandatory if TDS statements are not filed within the prescribed time, rejecting the appellant's argument regarding time limit extensions due to COVID-19. The Tribunal concluded that the appellant's failure to submit TDS statements within the specified timeframe justified the imposition of the late fee by the CPC(TDS). The appeal was dismissed on 17.11.2022.

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Issues:
Charging of late fee u/s 234E of the Act amounting to Rs. 30,600/-

Analysis:
The appellant contested the levy of penalty u/s 234E, arguing that late fees were not chargeable and that the time limit defined under rule 31A read with section 200(3) of the Act was not violated. The appellant pleaded for deletion of the late fee levied u/s 234E. However, the ld. CIT (A) upheld the penalty, emphasizing that the levy of the fee is mandatory if the statement is not delivered within the prescribed time under section 200(3). The CIT (A) dismissed the appellant's plea based on a bonafide belief about time limit extensions due to COVID-19, stating that the appellant, having deducted tax, was obligated to file the TDS statements within the prescribed time. The CIT (A) justified the late fee of Rs. 30,600/- imposed by the CPC(TDS).

The appellant's argument was further examined, where it was noted that the time limit for filing the 4th quarter TDS statements was extended only up to 31-07-2020 due to COVID-19. The CPC(TDS) imposed the late fee for delays beyond this date. The contention that the appellant was not responsible for tax deduction was refuted, as per the provisions of sec 200(3), which require any person deducting tax to submit TDS statements within the prescribed time. The appellant's failure to file the statements within the time limit justified the imposition of the late fee by the CPC(TDS). The ld. CIT (A) was deemed correct in confirming the late fee of Rs. 30,600/- as per the law.

In conclusion, the Tribunal found no merit in the appellant's grounds and rejected the appeal. The order pronounced on 17.11.2022 dismissed the appellant's appeal, upholding the levy of the late fee u/s 234E amounting to Rs. 30,600/-.

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