Indian Kanoon - Search engine for Indian Law

13, 2013-14, 2014-15 and 2015-16 intimating the sum due and payable in terms of Section 200A of the Act. Thereafter on 19.01.2021 yet another intimation with regard to the outstanding demand of TDS of Rs.6,54,350/- was issued for the period 2010-11 to 2015-16.

2.3. The petitioner submitted its response vide letter dated 29.01.2021 wherein it was stated that the Income Tax Department was not empowered to levy late fee under Section 234E of the Act prior to 01.06.2015, while also stating that interest could be waived and hence requested waiver of late fee and interest. The impugned order https://www.mhc.tn.gov.in/judis considering the above letter dated 29.01.2021 was passed stating that there is no power of waiver with regard to late fee under Section 234E of the Act and thus the request for waiver stood rejected while also drawing the attention of the petitioner to the judgment of the Madras High Court in the case of Qatalys Software Technologies Pvt. Limited reported in 115 taxmann.com 345 wherein the validity of the late fee levied under Section 234E of the Act was upheld and also to the judgment of the Gujarat High Court in the case of Rajesh Kourani v. Union of India and Ors., reported in (2017) 297 CTR 502 wherein the late fee under Section 234E of the Act was held to be operative with effect from 01.07.2012.

4. This Court finds that the above issue had engaged the attention of various High Courts insofar as the vires of Section 234E of the Act including the Madras High Court, Gujarat High Court, Karnataka High Court, Kerala High Court, Bombay High Court amongst others. There is uniformity in the view that the provisions of Section 234E of the Act insofar as it imposes fee for delayed filing of statement of tax deducted at source is constitutionally valid. However, divergent views have been expressed on the question as to whether late fee under Section 234E of the Act can be imposed even prior to 01.06.2015 whereby Section 200A(1)1(c) of the Act was amended and the fee to be computed in accordance with the provisions of Section 234E of the Act stood included while processing the statements of tax deducted at source.

24. If the facts of the present cases are examined in light of the aforesaid observation and discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by, us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2013 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence,the demand notices under Section 200A by the respondent- authority for intimation for payment of fee under Section 234E can be said as without any authority of law and the same are quashed and set aside to that extent.”

7.2. With the above overview of Section 234 E of the Act and on considering both the above views, it appears to me that the opinion expressed by the Gujarat High Court that Section 234E of the Act by itself creates a liability and the liability to pay the late fee is not dependent on Section 200A(1)(c) of the Act which only prescribes the recovery mechanism reflects the true intent and purpose of Section 234E of the Act. Section 234E of the Act which provides for late fee is the substantive provision and the levy is not dependent on Section https://www.mhc.tn.gov.in/judis 200A(1)(c) of the Act which only prescribes a recovery mechanism. A reading of Section 234E of the Act would make it clear that it gets attracted, the moment there is a failure on the part of a person to deliver or cause to be delivered a statement within the time prescribed in sub- section (3) of Section 200 or the proviso to sub Section (3) of Section 206C of the Act. The person committing the above breach / infraction renders himself liable to pay by way of fee a sum of Rs.200 everyday during which the failure continues. Sub-section (3) in fact provides for a self assessment / payment of the fee while delivering or causing to deliver a statement in accordance with sub-section(3) of Section 200 or the proviso to sub-section(3) of Section 206C of the Act. Sub Section(4) to Section 234E of the Act also makes it clear that the above provision would be effective from 01.07.2012. Therefore the submission that 234E of the Act would not be operable / effective unless and until Section 200A(1)(c) was introduced overlooks the fact that Section 234E (1) of the Act is the substantive provision and Section 234E(3) of the Act provides for a self declaration / payment for the delay in complying with sub-section(3) of Section 200 or the proviso to sub -section(3) of Section 206C of the Act. With due respect I am unable to subscribe to the view https://www.mhc.tn.gov.in/judis expressed by the Karnataka High Court in view of the reasons stated supra.