ITAT Kolkata Deletes Section 234E Late Fees for Pre-2015 TDS Returns
The Kaushalya Infrastructure Development Corporation Ltd filed the present appeal against the ITO, challenging orders passed by the CIT(A), who had upheld the levy of late fees for the delay in filing TDS returns.
Background of the case
During the hearing, the company argued that the legal provision allowing such fees under Section 200A(1)(c) came into effect only from June 1, 2015. It also said that the late fee under Section 234E was charged while processing returns and issuing notices before this date. Therefore, it said, no late fee could be imposed. The company relied on several High Court rulings to support its claim.
The Tribunal agreed with this argument. The tribunal also noted that multiple High Courts, such as Madras, Karnataka, and Kerala, have held that late fees under Section 234E cannot be charged through TDS processing for periods before June 1, 2015, as there was no enabling provision in the law at that time.
The bench observed that the tax department presented no contrary judgement from a jurisdictional High Court. Following established legal precedents, the Tribunal ruled that the fees were not valid.
As a result, all three appeals filed by the company were allowed, and the late fees imposed by the tax authorities were deleted.