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Levy of late fee on late filing of TDS return

Amendment in section 200A by Finance Bill 2015 w.e.f. 01-06-2015.

Till 31-5-2015 Income tax department has no power to process TDS return U/s 200A to levy TDS late fee U/s 234E

But w.e.f. 1-6-2015 as per Sec. 200A income tax department can levy late fee U/s 234E @ Rs. 200/- per day on delayed filing of TDS return.

Therefore if any late fee is levied before 1-6-2015 appeal can be filed for this or rectification application U/s 154 can be filed to get it cancelled.

Even if due to mistake any late fee U/s 234E is paid then refund will be granted of such excess late fee.

ITAT Amritsar has given a decision on this subject.

Before going to the decision, first we are reproducing the  amendment in section 200A wef 01.06.2015 .

In section 200A of the Income-tax Act, in sub-section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from the 1st day of June, 2015, namely:— 

"(c) the fee, if any, shall be computed in accordance with the provisions of section 234E; 

(d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee; 

(e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and (f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor.

So clause (c) was inserted only wef 01.06.2015 and prior to 1st June 2015, there was no enabling provision in the act for raising a demand in respect of levy of fees under section 234E.

Now ITAT ,Amritsar in the case of Sibia Healthcare Private Limited  Vs. Dy. Commissioner of Income-tax (TDS) I.T.A. No.90 /Asr/2015 dated 09.06.2015, has given a Decision on section 234E of Income tax act on Late Fee on late filing of E TDS return.

Extract of decision is given as under 

In view of the above discussions, in our considered view, the adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A.

This intimation is an appealable order under section 246A(a), and, therefore, the CIT(A) ought to have examined legality of the adjustment made under this intimation in the light of the scope of the section 200A. Learned CIT(A) has not done so.

He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A.

The answer is clearly in negative.

No other provision enabling a demand in respect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected.

As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage.
In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act.

So in Light of above decision it is very much clear that Late fee can not be imposed before 01.06.2015

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