ITAT Chennai Follows Madras High Court: No Section 234E Late Fee Through Section 200A Processing Before 01.06.2015

1. Background of the Dispute

The Income Tax Appellate Tribunal, Chennai Bench, adjudicated a batch of six appeals filed by Gopuram Enterprises Private Limited (formerly known as “SAVORIT LIMITED”) against the levy of late fee under Section 234E of the Income Tax Act 1961 in respect of delayed quarterly TDS statements. These appeals related to Assessment Years 2013-14 to 2014-15, and arose from separate but identically dated orders passed on 31.10.2019 by the Commissioner of Income Tax (Appeals)-17, Chennai.

The appeals, numbered ITA Nos. 1002 to 1007/Chny/2024, were heard on 24.06.2024, and the Tribunal pronounced its consolidated order on 26.06.2024.

The core controversy was limited to one legal question:

Whether late fee under Section 234E could be validly imposed while processing quarterly TDS statements under Section 200A for periods prior to 01.06.2015, when clause (c) to Section 200A(1) was not yet on the statute.

2. Facts Leading to the Appeals

2.1 Filing of TDS Statements and CPC Intimations

  • The assessee had filed quarterly TDS statements in Form 26Q for relevant quarters of Assessment Years 2013-14 and 2014-15.
  • These statements were admittedly filed after the statutory due dates prescribed under the Act.
  • The CPC (TDS), Ghaziabad processed these statements under Section 200A and, in the course of such processing, levied late fee under Section 234E for the delay in filing.

The imposition of this late fee, embedded in Section 200A intimations, was challenged by the assessee before the first appellate authority.

2.2 Order of the Commissioner (Appeals)

Before the CIT(A), the assessee’s prayer primarily concerned condonation of delay. However, the Commissioner (Appeals) proceeded not only to address delay but also to rule on the validity and applicability of Section 234E for the period prior to 01.06.2015.

After discussing various judicial precedents and statutory provisions, the CIT(A) concluded, inter alia, that:

  • The constitutional validity of Section 234E had already been upheld by different High Courts.
  • Consequently, according to the CIT(A), the obligation to levy and collect late fee under Section 234E existed with effect from 01.07.2012.
  • Any defect in not passing a separate order under Section 234E, where the fee was instead included in the Section 200A intimation, was treated as a curable irregularity protected by Section 292B.
  • On this reasoning, the CIT(A) confirmed the levy of late fee in all the appeals.

Aggrieved, the assessee carried the matter to the ITAT, Chennai.

3. Assessee’s Contentions Before the Tribunal

While the Tribunal ultimately relied on binding High Court authority, the assessee had raised multiple grounds, key aspects of which included: