Kerala High Court has granted interim stay on Levying of Fees for failure of filing TDS/TCS statement on time under section 234E.

Section 234E which was inserted by Finance Act, 2012 provides a late fee of Rs.200/- per day’s delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).

The constitutional validity of Section 234E of the Income Tax Act, 1961 has been challenged in the Kerala High Court in the case of Narath Mapila LP School vs. UOI WP (C) No. 31498/2013(J). Vide an interim order dated 18.12.2013, the High Court has admitted the Petition and granted a stay of proceedings for a period of two months.

Posted 3 years, 9 months ago by Manish Agrawal

Manish, can i know what were the grounds of the challenge of the provision of section 234E and under which article under the INDIAN CONSTITUTION the constitutional validity was violated / infringed. I believe a few basic input would help all of us get an idea and better understanding of the writ petition you have shared with us. Thanks for sharing the writ petition. Regards, CA. Sundeep S Kamath

Posted 3 years, 9 months ago by CA Sundeep Kamath

Mumbai High Court rules - 234E fees constitutionally Valid Rashmikant Kundalia vs. UOI (Bombay High Court) S. 234E: The late filing of TDS returns by the deductor causes inconvenience to everyone and s. 234E levies a fee to regularize the said late filing. The fee is not in the guise of a tax nor is it onerous. The levy is constitutionally valid The late submission of TDS statements means the Department is burdened with extra work which is otherwise not required if the TDS statements were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the Department. A person deducting the tax (the deductor), is allowed to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed under section 234E of the Act. In other words, the late filing of the TDS return/statements is regularised upon payment of the fee as set out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the Petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax. Full judgment can be seen from link given below:

Posted 2 years, 6 months ago by SANJAY GUPTA

Dear Sanjay, Any provisions under the law cannot override the principle of natural justice, as upheld by international law. When there is a dispute on provision of any law, there should be a procedure for appeal. Now Section 234E, as propogated by Income Tax Department does not contain an appealable provision, which infact is opposite to the principles drawn by any law. Its always being a fact, Income tax department says the late filing causes extra work, but when date of deduction, remittance and challan are all regularly performed, and filing is delayed the penalty provisions under section 234E should not unnecessarily burden the assessee for non compliance. If taxes are remitted late, there are statutory provisions for levy of interest. Its some thing like, if you fail to file your return, the Income tax department shall collect Rs. 200 per day...! Does that make sense...? I hope as member representing the industry, i say the provisions of section 234E should be relooked. Regards CA. S kamath

Posted 2 years, 6 months ago by CA Sundeep Kamath

Sundeep Ji Most definitely the provision of section 234E needs a re look. But what i am saying is as of now we have to make payment of Fees u/s 234E.

Posted 2 years, 6 months ago by SANJAY GUPTA

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