TDS late filing fees 234E is now constitutionally valid - Professionals - GST - TIK Share
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TDS late filing fees 234E is now constitutionally valid


CA Pulkit Sharma

2015-03-01

A mail from service tax department is forwarded confirming that levy of late filing fees under section 234E is constitutionally valid.

The parts of mail are:

Section 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). The provision for Levy of Late filing fee was introduced to improve Filing Compliance and to avoid subsequent inconvenience to the taxpayers due to inordinate delays in availability of tax credits in their 26AS Statements.

This assumes further significance in view of the decision of the Hon'ble High Court of Bombay, dated February 6 2015, upholding the validity of the Levy for Late Filing u/s 234E. The court has observed the following in its decision in the case of Rashmikant Kundalia vs. UOI:

    • 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.

 CPC(TDS), in its endeavor to strengthen TDS Compliance, is reaching out to you to reiterate the essence of timely filing of Quarterly TDS Statements. Section 200(3) of the Income Tax Act, 1961 read with Rule 31A of the Income Tax Rules, 1962, prescribes the following due dates for filing of TDS Statements:

For Non-Govt. Deductors

Quarter

Form Nos. 24Q & 26Q

Form No. 27Q

Form No. 27EQ

April to June

15th July

15th July

15th July

July to September

15th October

15th October

15th October

October to December

15th January

15th January

15th January

January to March

15th May

15th May

15th May

For Govt. Deductors

Quarter

Form Nos. 24Q & 26Q

Form No. 27Q

Form No. 27EQ

April to June

31st July

31st July

31st July

July to September

31st October

31st October

31st October

October to December

31st January

31st January

31st January

January to March

15th May

15th May

15th May

Where the TDS Statements are not filed within the due date, CPC (TDS) sends Intimations u/s 200A of the Act that includes Levy under section 234E. Your attention is hereby drawn towards the provisions of section 234E of the Act (Levy for Late filing of TDS Statement), which reads as follows:

    • Without prejudice to the provisions of the Act, where a person fails 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, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
    • The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.
    • The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.
    • The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.