- Late fee levied u/s. 234E not in line with requirements of section :
For your current reference, the text of Section 234E is produced below :
“234E. (1) 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.
(2) 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.
(3) 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.
(4) 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 206Cwhich 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.”
Going with the clear wordings of sub-section (3) of section 234E, inference could be made that; the late fee is a duty to pay just at the time of delivering the TDS statement and not later than this. The authorized TIN- NSDL centre which accepted the TDS statement also accepted these without late fee, as well as the software utility of the TDS department itself accepted these without late fee.
Once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later on. There is no any specific provision in the Act to recover the late fee after accepting the TDS returns/statements, hence the late fee cannot be recovered for F.Y. 2012-13, as it is not collected at the time of delivering of TDS statement to the department.
- Section 200A does not empower to raise demand regarding Section 234E :
Relevant section 200A is produced below :
“200A. (1) where a statement of tax deduction at source has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:—
(a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:—
(i) any arithmetical error in the statement; or
(ii) an incorrect claim, apparent from any information in the statement;
(b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement;
(c) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest;
(d) 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 (c); and
(e) the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor :
Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed.
Explanation.—For the purposes of this sub-section, “an incorrect claim apparent from any information in the statement” shall mean a claim, on the basis of an entry, in the statement—
(i) of an item, which is inconsistent with another entry of the same or some other item in such statement;
(ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act.
(2) For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section.”
According to the section, it could be made out without iota of doubt that demand of late fee cannot be raised by way of processing of TDS statement, because provisions of Sec. 200A of the Act does not cover default in payment of late fee u/s. 234E, except any arithmetical error, or incorrect claim, or default in payment of interest, any TDS payable or refundable etc.
Looking to & considering the above observations, the amount of late fee intimated through intimation u/s. 200A is bad in law and should be rectify u/s. 154; consequently, the late fee charged in above quoted order / intimation is to be deleted & a revised intimation u/s. 200A may be intimated to the assessee.
CAclubindia
