AI Drafter 
TaxTMI 
TaxTMI 
2020 (1) TMI 16
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....to levy of fee under section 234E of the Income Tax Act, 1961 (for short "the Act") while processing the TDS statement under section 200A of the Act. 3. Brief facts are, during the year under consideration, the assessee entered into an agreement with M/s. Accent Construction Pvt. Ltd., for purchase of 96 flats. Vide allotment letter dated 29th October 2015 the flats were allotted to the assessee for a total consideration of Rs. 100,51,65,650. While making a part payment of the sale consideration on 29th October 2015, the assessee deducted tax @ 1% under section 194IA of the Act. However, the assessee paid the TDS amount in Form no.26QB belatedly. While processing the TDS statements under section 200A of the Act, the Assessing Officer fin....
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....tober 2015, the assessee paid a part of the sale consideration amounting to Rs. 55 crore to the developer / builder and while making such payment, the assessee in compliance to the provisions contained under section 194IA of the Act has deducted tax at source @ 1%. Since there was a delay in filing the TDS statements as provided under section 200(3) of the Act, the Assessing Officer while processing the TDS statements under section 200A of the Act has levied fee under section 234E of the Act. Challenging the levy of fee under section 234E of the Act, the learned Authorised Representative has made submissions before us, which can be summarized as under:- i) Due to paucity of space in Form no.26QB, assessee was compelled to deposit T....
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....rovision. In fact, in our view, the contention of inapplicability of section 194IA of the Act is redundant and is not available to be taken by the assessee. Once the assessee has proceeded to deduct tax at source under section 194IA of the Act, all legal consequences arising in pursuance thereto would automatically follow. As per rule 30A the tax deducted at source under section 194IA has to be deposited within the time and in the manner prescribed therein and in terms of rule 31A assessee has to submit the statements of TDS as provided under section 200(3) of the Act. In fact, a cursory look at Form no. 26QB would reveal that it refers to Rule 30A and 31A of the Rules. The assessee having deducted tax at source not only has to deposit the ....
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.... not punitive in nature. The fee is a fixed charge for the extra service which the Department has to provide due to the late filing of the TDS statement. The Court held, the fee charged under section 234E of the Act is nothing but a privilege and a special service to the deductor allowing him to file TDS returns / statements beyond the time prescribed by the Act and the Rules. The Court has held that on payment of the fee under section 234E of the Act, the deductor is allowed to file the TDS returns/statements beyond the prescribed time so that it can be regularized. Thus, from the aforesaid decision of the Hon'ble Jurisdictional High Court, it is evident that the fee under section 234E of the Act is nothing but a privilege or special s....
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....e the challan-cum-statement is generated on a single date, therefore, it will not come within the purview of section 200(3) of the Act, is unacceptable. Thus, we are of the view that the TDS statements in Form no.26QB also comes within the ambit of section 200(3) of the Act. 12. The next contention of the learned Authorised Representative that no additional burden is cast on the Departmental Authorities is also equally unacceptable considering the fact that there is a delay in filing the TDS statement in Form no. 26QB. As held by the Hon'ble Jurisdictional High Court in case of Rashmikant Kundalia & Anr. (supra) for the purpose of allowing the assessee to file TDS statement beyond the prescribed time and for regularizing the sa....
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....count the delay in filing each of the statements. That being the case, assessee's contention that fee under section 234E of the Act is to be restricted to one transaction is not acceptable. At this stage, it will be relevant to observe, clause (c) of sub-section (1) of section 200A of the Act contemplates that while processing the TDS return, fee under section 234E of the Act shall be computed. Thus, use of word "shall" in the aforesaid provision makes it mandatory on the part of the Assessing Officer to levy fee under section 234E of the Act. Since, the assessee has filed separate TDS statements under section 200(3) of the Act read with rule 26QB, there is no error on the part of the Assessing Officer in computing fee under section 234E of....