Section 234E of Income Tax Act -Fees for Default in TDS/TCS statements

By | October 18, 2016
(Last Updated On: October 18, 2016)

 Section 234E of Income Tax Act

Inserted by the Finance Act, 2012, w.e.f. 1-7-2012.

Section 234 prescribe fees for default in furnishing TDS/TCS statements.

Section 234E :- Fee for default in furnishing statements.

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) ofsection 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.]

Judgments on Section 234E of Income Tax Act

Provisions of section 234E are neither ultra vires nor unconstitutional – Dr. Amrit Lal Mangal v. Union of India [2015]  (Punj. & Har.).

Absence of any provision for condonation of delay and appeal does not make imposition of late fees under section 243E ultra vires Dundlod Shikshan Sansthan v. Union of India [2015]  (Raj.).

Section 234 levies a fee to regularize said late filing which is a fixed charge for extra service which department has to provide due to late filing of TDS statements and is not in guise of a tax nor is it onerous. Thus, section 234E does not violate any provision of Constitution and is therefore intra viresRashmikant Kundalia v. Union of India [2015]  (Bom.).

Fee levied under section 234E to regularize late filing of TDS statements could not be held to be ultra vires of Constitution – Lakshminirman Bangalore (P.) Ltd. v. Dy. CIT [2015]  (Kar.).

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