When you remit the TDS not within the due date you have to remit it with necessary interest.  You can file the TDS return say 26Q only after remitting the TDS.   As you have already remitted the interest for your fault, how can the assessee be levied 234E fee for the consequential delay.  If it is so, there is two punishment for a single fault.  It is not permissible under any law.  We can wait for any court decision in this regard.

Hi

Late fee u/s 234e is a levy not a penulty

further it is a different from interst on late deposited TDS, because it is levy for non submission of return timely same as in income tax return.

Regarding nature of payment (in case of late fee u/s 234e), no clearification has been givn by dept, you may select any of section shown in your return

Sir, i have received INTIMATION U/S 200A OF THE INCOME TAX ACT, Under late file charges, actual it is exceed on Qurter tds amount.  Is there any way to aviod this late return file?

maximum late fees u/s 234e will be Rs. 200 per day upto  late filling of TDS return or TDS amount of that quarter.

Further this late fee cannot be reduced

Sir We have paid late payment interest on deducted TDS with interest rate of 18% p.a. therefore we have to pay penalty on late filling return. What is penalty rate.

Agreed to pay in challan 281, but under what section this should be paid

Regarding nature of payment (in case of late fee u/s 234e), no clearification has been givn by dept, you may select any of section shown in your return.

 late fees u/s 234e will be Rs. 200 per day upto  late filling of TDS return or TDS amount of that quarter. 

Further this late fee cannot exceed of TDS amount of that quater

 

The constitutional validity of 234E has been challanged in the kerala high court  in case of 
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Narath mapila LP school vs UOI
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and vide interim order dated 18.12.2013 the high court has admitted the petition and granted a stay of proceedings for a period of 2 months 

 

Sir, what is the penalty / interest on TDS Return Late Fileing ?

what is the penalty on vat return late fileing ?

what is the penalty of sale tax return late fileing ? 

we can deposit service tax month our is Pvt. Ltd. 

 

pls help 

 

 

 

I would like to get your attention on the matter that

Interest @ 1% per month is for late deduction of TDS and it is 1.5% per month for late payment of TDS.

234E:

Since the deduction has been made and the same was paid to the govt, why dont furnish the return to the department? If you didnt furnish the tds statement, innocent tax payer will not get the credit of the same and the assessment will never complete as the supreme court has recently given a judgment that the tax payer shall not be penalised for non filing of TDS return by deductor. 

Even though, am of the opinion that the penalty should have cieling limit say 5000/- or 10000/-

Matters in 234E:

As per sec 234E, it is not a penalty. It is a fee for defualt.

 

 

Already TDS department charged Rs 92000/- penalty for late filing of TDS Return is there any chance to wayoff of that amount plz tell me anyone.

 

TDS RETURN LATE FEE U/S 234E : FAQ & APPEAL FORMAT Before preparing for appeal go through the following FAQs :- Q.1 What to do if you receive an intimation U/s 200A by processing a tds statement creating a demand of late fee U/s 234E ? Is the demand of late fee appealable ? A.1 You may file an application U/s 154 of the act for rectification of mistake to tdscpc through email id contactus @ tdscpc.gov.in or u may directly file an appeal U/s 246A before your local jurisdictional Commissioner of Income Tax- Appeals. Demand of late fee is subject to rectification and also appealable because notice of demand of late fee is issued U/s 200A. Q.2 What is the time limit to file a rectification application U/s 154 ? A.2 Within four years from the end of the financial year in which the order U/s 200A was passed. Q.3 What to do if the application U/s 154 is rejected by tdscpc ? A.3 You may file an appeal U/s 246A against such 154 rejection order within 30 days from the date of rejection. Q.4 Can you directly file an appeal against order U/s 200A without filing a rectification application ? A.4 Yes, you can directly file an appeal against order U/s 200A, within 30 days from the date of upload of notice U/s 200A to your tdscpc inbox. Q.5 What will be treated the date of service of notice U/s 200A ? A.5 Date of upload of the order U/s 200A to your tdscpc inbox is treated as date of service of notice, and not the date of receipt of notice by post. Q.6 How to file a direct appeal if the time limit of 30 days have expired from the date of upload of order U/s 200A ? A. 6 First of all file a rectification application U/s 154 of the act to tdscpc, if they reject it then file an appeal against this rejection order. The time limit of 30 days start from the date of rejection of rectification application. Presently order of rectification application are being passed by tdscpc within 4 to 8 days from the date of filing application U/s 154. Q.7 If the department can not recover late fee, so should you file tds statement in future also delayed by due date ? A. 7 No, make it a practice to strictly file a tds statement in due date, above system of appeal etc. is only for unintentional delay. Q.8 What is the difference between due dates of filing tds statement for Govt Deptt. and others ? A.8 Govt. departments are allowed 15 days extra for filing a tds statement than the due dates for others, e.g. due date for Quarter 1 is 15th July for others then it is 31st July for Govt. Deptt. Q.9 Should you use the following format for filing an appeal ? A.9 Grounds of appeal may be kept brief and detailed grounds of appeal can be submitted at the time of hearing and change or modify the grounds of appeal as per you case. Q.10 Can any assessing authority pass any order u/s 234E of the Act? A.10 The act does not allow any assessing authority to pass an order u/s 234E of the act therefore any recovery also cannot be made u/s 234E. Q.11 Why the Income Tax Department cannot make any recovery u/s 234E ? A.11 The deductor is not an assessee for the purpose of Sec. 234E and also the deductor is not treated as an “assessee in default” for the purpose of Sec. 234E, therefore no recovery can be made by raising demand of late fees. SUGGESTED APPEAL FORMAT :- Before the Hon’ble Commissioner of Income Tax (Appeals)-I, Indore In the case of Govt. college V/s DCIT-CPC-TDS A.Y. 2013-14 Qtr.2 TAN: - B P L G 0 3 4 --- STATMENTS OF FACTS 1. That the assessee had filed his TDS Quarterly statement of Quarter 2 of F.Y. 2012-13 on 7thOct.2013 which was due to be filed on 31thOctober 2012.Therefore it was delayed by 342 Days. 2. That the Ld. Assessing officer (tdscpc) had imposed a late fees U/s 234E for 342 days Rs.42000/- for delay in filing of Quarterly TDS statement. 3. That the Due date of filing of TDS Return for Q2 of F.Y. 2012-13 was 31th October 2012. 4. That As per the provisions of Sec. 234E of the Act “if a person fails to deliver or cause to be delivered a statement within the prescribed time period then he shall be liable to pay Late fees @ Rs.200/- per day before filing the tds statement. 5. That the Ld assessing officer Imposed the late fees as follows:- TDS statement for the Quarter Due date of filing TDS statement Actual date of filing TDS statement Delay days Late fees U/s 234E Q4 31th Oct 2012 07thOct2013 342Days 42000* *Amount of late fees @ 200per day 68400/- or TDS deductible i.e. 42000/- Whichever is lower i.e.42000/- (6) That as per provisions of sec 201(1) of the Act also an assessee cannot be treated in default & TDS statement cannot be treated as defective due to non-payment of late fees U/s 234E, like non-payment of self assessment tax & interest alongwith return U/s 139(1) treats an income tax return as defective U/s 139(9) of the Act. (7) Sec. 201(2) of the act states that if a person has failed to deposit tax and interest then it shall be a charge upon all the asset of that person, so it also does not cover late fee amount, so it is clear that the intention of the law is not to cover/recover late fee if not deposited alongwith tds statement. (8) That the levy of late fees is illegal and wrong and not in accordance with law. GROUNDS OF APPEAL Late Fees of Rs.42000/- imposed U/s 234E 1) That The Ld. Assessing officer (TDSCPC) had levied a late fees of Rs.42000 /- & issued order U/s 200A of the Act. 2) That the Sub section (3) of the section 234E of the Act states that it shall be paid before delivering a TDS statement. It means that any late fees should have been deposited just at the time of delivering TDS statement and not later than this. 3) That once the TDS statement has been accepted without late fees, then such late fee cannot be recovered later on. In the view of the above, late fee cannot be recovered later on by way of any notice, no notice of demand U/s 156 can be issued for this. 4) That the Provisions of Sec.204 of the Act has made the person responsible for Sec. 190 to Sec. 203AA and Sec.285, this phrase does not cover Sec.234E, it means no one is responsible for default U/s 234E of the Act. It also clears that if late fees are due but not deposited along with the TDS statement none can be held responsible to deposit it later on. 5) That the sec.200A of the Act does not permit processing of TDS statement for default in payment of late fees, except any arithmetical error, or incorrect claim, or default in payment of interest and TDS payable or refundable etc. Hence late fees for TDS quarterly statement cannot be recovered by way of processing under section 200A. Therefore no demand notice cannot be issued under this section, but if issued, then it is illegal. Hence liable to be cancelled. 6.) Recovery can be made of any amount which is legally payable, if the amount has not become legally payable, then how the recovery can be made for late fee. 7) That the basic concept behind TDS is, to deposit the Tax on the income of deductee as he earns the income. Therefore deductor/recepient has deposited the tax timely. No such offence has been committed by the assessee that he deducted the TDS & not deposited the Tax and utilizing the money for his purpose .Therefore No Late fees can be imposed on the assessee. 8) In view of the above submissions order U/s 200A of the Act imposing late fees U/s 234E has to be cancelled and quashed. 10) The act does not allow any assessing authority to pass an order u/s 234E of the act therefore any recovery also cannot be made u/s 234E. 11) The deductor is not an assessee for the purpose of Sec. 234E and also the deductor is not treated as an “assessee in default” for the purpose of Sec. 234E, & therefore no recovery can be made raising demand of late fees. 9) The appellant craves leave to add, alter or withdraw any of the grounds of appeal. Thanking You Signed (Appellant) ---------------------------------------------------------------------------------------- Following points can also be taken as grounds of appeal if tds statement was delayed because tds was deducted late :- 1) That the Section 200(3) of the Act says that the TDS statement shall be filed after paying the tax deducted & Rule 31A talks about filing of TDS statement where deduction is made under section 190 to section 196D .Therefore it does not impose a liability of filing a Quarterly statement in the cases where Tax was deductible but not deducted. 2) That the procedure of Filing a TDS Quarterly statement is following As per rule 31A:- i) Deduct the TDS when it is required to be Deducted at a proper Rate, on proper amount in proper time. ii) Then deposit the TDS deducted above iii) After depositing TDS it is required to File a Quarterly statement on prescribed time. In such case where no TDS which was deductible but not deducted & deposited a Quarterly TDS statement cannot be filed. Therefore the imposition of late fee in such a case is illegal. 3) That the section 200A (1) of the Act says that “Where a statement of Tax deduction at source has been made by a person deducting any sum”. Hence it does not cover the cases of tax deductible but not deducted at all. Therefore the Section does not permit processing of TDS Quarterly statement in a case where no deduction has been made. Therefore TDS quarterly statement has to be filed for the Quarter in which TDS has been deducted & deposited and not in the quarter in which sum has been paid. By CA RAJESH MEHTA FCA, DISA (ICAI) 203 MANAS BHAWAN EXTN., 11 RNT MARG, INDORE 09827036956, 09424818719 rajeshmehta_indore @ yahoo.com rajeshmehtaindore @ gmail.com

234E will not apply to cases where TDS payment is made beyond the time limit prescribed for payment of TDS u/s 200(3)

There are two reasons

Reason 1

Duty of person deducting tax. 200. [(1)] Any person deducting any sum in accordance with [the foregoing provisions of this Chapter] shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. [(2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs.] [(3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time,[prepare such statements for such period as may be prescribed] and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.] –

Section 200(3) says we have to file our Quarterly return AFTER paying the TDS within the prescribed time. If we pay the TDS amount to the credit of the CG after the due date for payment there is no requirement for us to file our TDS return at all as per section 200(3). When Charging mechanism fails where is the question of collection FEES Case law of Supreme Court P.C.Srinivasa Chetty (Sine charging mechanism for operation of 234E fees is 200(3). They can charge fees only when we made the tds payment within the prescribed time but have not filed my Quarterly return within the prescribed time

Reason 2

Okay We will harmoniously interpret the section in spirit along with section 201. After payment within the prescribed time or after the prescribed time we have to file the Quarterly return!! i hope we all agree. Section 200(3) say we should pay and file Quarterly return else our TDS return is invalid. I missed the prescribed date for payment and also the prescribed date for the Quarterly return Now We paid our TDs to government along with interest u/s 201 and filed our return immediately.

Part 1

Then you cannot charge us fees under 234E, since without payment of tax we cannot upload the return. If Department is not accepting the return how can they ask fees for not filing within the due date LAW CANNOT ASK PEOPLE TO DO WHAT IS NOT POSSIBLE TO DO

Part 2

Let me recall a splendid decision given a decade ago Where books of accounts are not maintained you cannot penalize Assessee for not getting his books of accounts audited Ram Prakash C Puri – 77 ITD 210 Department said you have not paid our tax pay interest (interest is compensatory in nature) We pay from due date to date of payment.

Now when we pay interest for late payment how can wer / why should we again compensate the Government in the form of 234E fees.

Section 234E starts saying ”Without prejudice to the provisions of the Act” and does not start as ‘NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISIONS OF THIS ACT’ .

So Technically the Start of Days for 234E Fees is from Due date from filling of Quarterly return or Date of TDS remittance which ever is latter.

S. 234E: High Court grants interim stay on enforcement of notices for levy of fee for failure to file TDS statement S. 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day’s delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).

The constitutional validity of s. 234E has been challenged in the Karnataka High Court. Vide an interim order dated 19.02.2014 the High Court held as follows:

"Petitioners have questioned the constitutional validity of the provision of Section 234E of the income Tax Act and a notice to the petitioner levying fee vide annexure A1 to A21 and Annexure – B. Pending consideration of the grounds in the writ petition, it is desirable that enforcement of notices referred to above issued by the 4th respondent are stayed until further orders."

Note: A similar stay has been granted by the Kerala High Court in Narath Mapila LP School vs. UOI

-Rinav Khakhar 

(Partner at KHAKHAR ASSOCIATES)