ITAT Chennai Deletes Section 234E Late Fee for Pre-June 2015 TDS Period — Shivsu Pielkenrood Watek Ltd. vs ITO
Background and Context
The Chennai Bench of the Income Tax Appellate Tribunal recently adjudicated an appeal filed by Shivsu Pielkenrood Watek Ltd. against an order passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, dated 16.02.2026, pertaining to Assessment Year 2014-15. The matter centered on two distinct but interrelated questions — first, whether the inordinate delay in approaching the appellate authority could be condoned, and second, whether the late fee of Rs. 35,160/- imposed under Section 234E of the Income Tax Act, 1961 vide order dated 28.02.2014 was legally sustainable.
This decision reinforces a well-established line of judicial reasoning that has consistently held that prior to 01.06.2015, the authorities lacked the statutory power to levy fees under Section 234E at the time of processing TDS statements under Section 200A of the Income Tax Act, 1961.
The Dispute in Brief
Shivsu Pielkenrood Watek Ltd., a private limited company, was subjected to a late filing fee of Rs. 35,160/- under Section 234E of the Income Tax Act, 1961 through an order dated 28.02.2014. The assessee subsequently approached the CIT(A) on 30.06.2025, which meant the appeal carried a delay of more than 11 years. The CIT(A) dismissed the appeal in limine — that is, without examining the merits — solely on account of this substantial delay.
Aggrieved by this outcome, the assessee carried the matter before the Tribunal, contending both that the delay deserved to be excused and that the underlying issue of levy of Section 234E fees was already conclusively settled by binding judicial precedents in its favour.
Condonation of Delay — The Tribunal's Reasoning
Principles Drawn from Supreme Court Precedent
The Tribunal began by examining the foundational principles governing condonation of delay, drawing upon the Supreme Court's landmark ruling in Collector, Land Acquisition Vs. Mst. Katiji & Ors., (167 ITR 471). The Apex Court had articulated six guiding principles in that decision, which the Tribunal reproduced and applied:
"(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
Application to the Facts
The Tribunal found that the substantive merits of the assessee's case were clearly covered by settled judicial authority — specifically, decisions of the jurisdictional High Court and coordinate Benches — holding that prior to 01.06.2015 no enabling provision existed under Section 200A of the Income Tax Act, 1961 to levy fees under Section 234E during TDS statement processing. Given this position, refusing to condone the delay would amount to legalising injustice on a purely technical ground, which the Tribunal was capable of correcting. Accordingly, the delay in filing the appeal before the CIT(A) was condoned.