234e: whether to pay or not to pay?

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This query is : Resolved

yashsr (Querist)

24 March 2014 Hello,

As you probably know, the late filing fees of Rs.200/- per day of Sec 234E has been stayed by the Kerela and Karnataka High Courts temporarily. However, have we reached a conclusion? I have some clients who file TDS return themselves and have got a notice for late filing fee under Sec 234E. What should we recommend them?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

24 March 2014 at present matter is pending in sc so better pay now for avoiding bad consequences and then if it favours assessee in sc's dec then file itr and claim refund.

Nikhil Kaushik

Nikhil Kaushik (Expert)

26 March 2014 the matter is pending with high courts and not with SC.

i dont know from where ITR came into picture.

I would suggest that file a request with jurisdictional TDS AO for keeping demand in abeyance pending verdict from Kerala or Karnataka high court.

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Nikhil Kaushik

Nikhil Kaushik (Expert)

09 February 2015 Mumbai High Court rules - 234E fees constitutionally Valid

Rashmikant Kundalia vs. UOI (Bombay High Court)

S. 234E: 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

The late submission of TDS statements means the Department is burdened with extra work which is otherwise not required if the TDS statements were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the Department. A person deducting the tax (the deductor), is allowed to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed under section 234E of the Act. In other words, the late filing of the TDS return/statements is regularised upon payment of the fee as set out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the Petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax

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