2024 (10) TMI 1577 - HC - Income Tax

Madras HC quashes late fees under Section 234E for 2012-13 and 2013-14 assessment years

Lingeswara Creations Represented by Proprietor Mr. P. Rathinasamy Versus The Principal Chief Commissioner of Income Tax, The Chief Commissioner of Income Tax (TDS), The Assistant Commissioner of Income Tax, The Deputy Commissioner of Income Tax, The Income Tax Officer, Tiruppur.

The Madras HC set aside demand intimation letters imposing late fees under Section 234E for assessment years 2012-13 and 2013-14. The court held that ... Levy of late fee u/s 234E - processing TDS statements under Section 200A - HELD THAT:- In the present case, the respondent had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015. Therefore, in the absence of any provisions under Section 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside. Issues:Challenge to Demand Intimation Letters dated 27.03.2019 based on imposition of late fee under Section 234E of the Act while processing TDS statements under Section 200A of the Act.Detailed Analysis:The judgment concerns a Writ Petition challenging Demand Intimation Letters dated 27.03.2019, which imposed late fees under Section 234E of the Act during the processing of TDS statements under Section 200A of the Act. The Court referenced a prior judgment involving M/s. True Blue Voice India Private Ltd., which highlighted the issue of whether late fees can be imposed under Section 234E while processing TDS statements under Section 200A. The introduction of Section 200A(1)(c) of the Act in 2015 was discussed, emphasizing the need for a mechanism to compute late fees under Section 234E during TDS statement processing. The judgment clarified that prior to the introduction of Section 200A(1)(c), authorities were not empowered to impose late fees during TDS statement processing.Furthermore, the Court rejected the argument for retrospective application of Section 200A(1)(c), emphasizing that late fees under Section 234E could not be imposed without the specific provision in Section 200A. The respondent's claim that only the Commissioner of Income Tax could waive late fees under Section 264C was also addressed. Ultimately, the Court held that late fees imposed under Section 234E for assessment years before the introduction of Section 200A(1)(c) were not valid. The impugned Demand Intimation Letters were set aside, directing the Department to consider the petitioner's reply as a revision application and pass appropriate orders within eight weeks.In conclusion, the Court found that late fees imposed under Section 234E without the presence of Section 200A provisions for computation were not justified. The judgment emphasized the importance of statutory provisions and timelines in imposing late fees for TDS statement processing. The decision highlighted the necessity for a clear legal framework for late fee determination during TDS processing, ensuring compliance and effective deterrence against delays.