INCOME TAX ACT, 1961

Section 234E

Tax deduction at source - Fee under section 234E - Late filing of TDS return - Maintainability

Petitioner had deducted tax as per the provisions of Chapter XVII-B of the IT Act for the period from 1-4-2013 to 31-3-2014 and 1-4-2014 to 31-3-2015. It was submitted that the tax deducted was deposited as required. However, there was delay in filing e-TDS returns and accordingly, by way of intimation under section 200A, a late fee under section 234E of the Act was levied. Tribunal remitted the matter back to CIT(A) and while doing so, it had observed that appeals on remand would be required to be taken up after the proceedings under section 264 initiated by petitioner were disposed of since if the levy under section 234E was deleted by CIT under section 264, the question of there being any liability on account of interest under section 220(2) would not arise. It was submitted that though there was delay in initiating such proceedings, in light of legal position arising from the judgment of this Court in the case of Fatheraj Singhvi v. Union of India (2016) 73 taxmann.com 252 (Kar) : 2016 TaxPub(DT) 4175 (Karn-HC), the Department did not have any authority to seek computation of fee under section 234E with respect to the period prior to 1-6-2016 and authority ought to have condoned the delay. Held: As legal position that emanates from the judgment of Fatheraj Singhvi (supra), revenue did not dispute it though it is pointed out that contrary view has been taken by the High Court in the case of Rajesh Kourani v. Union of India & Ors. (2017) 297 CTR (Guj) 502 : 2017 TaxPub(DT) 1953 (Guj-HC). In this regard, taking note that the judgment of Division Bench in the case of Fatheraj Singhvi (supra) had attained finality, the law laid down is required to be taken note of by this Court as well as the Revisional Authority. In light of the facts and noticing the position of law that would emanate on reading of Fatheraj Singhvi (supra), it would serve the interests of justice to set aside order. Thus, delay as made out was condoned by taking note of the law laid down in the case of Fatheraj Singhvi (supra).

REFERRED : Rajesh Kourani v. UOI (2017) 297 CTR (Guj) 502 : 2017 TaxPub(DT) 1953 (Guj-HC) and Sri Fatheraj Singhvi & Ors. v. UOI & Ors. (2016) 73 taxmann.com 252 (Kar) : 2016 TaxPub(DT) 4175 (Karn-HC)

FAVOUR : Petition allowed

A.Y. :

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