Many dedutors have reported about recipt of Notice to deposit Late fees for late filing of quarterly Etds statments (Form 24Q,26Q,27Q,27EQ) in recent past under section 234E of Income Tax Act . We have already published a Post regarding above topic
so that you may face no problems at latest stage . But CA Rajesh Mehta Ji have summaried few generally unknown concepts of Late fees under section 234E which are given as under.
Provisions of Sec. 234E has been made applicable w.e.f. 1st July, 2012. It states that
“Amount of late fee @ Rs. 200/- per day shall be paid before delivering a TDS statement”,
It means that any late fee should have been deposited just at the time of delivering TDS statement and not later than this.
Once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later on. However this late fee cannot be waived later on even for any reasonable cause, because it is not a penalty but a late fee.
As per provisions of Sec. 234E(4) late fee is applicable for
“TDS statement 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 1st day of July 2012”.
Late fee cannot be recovered for TDS statements which were due for F.Y. 2011-12.
Further ,TDS statement late fee cannot be recovered for F.Y. 2012-13 or till today, if not collected at the time of delivering TDS statement to the NSDL (Income Tax department).
No Late fees if tds deducted late or not deducted :
If a person has failed to deduct TDS or failed to collect TCS then also late fee is not applicable for such period of failure, because late fee under section 234E is imposable only in cases of default where the assessee has failed to furnish tds return ( statement) for tax deducted or collected at source. So it does not cover cases where assessee has failed to deduct TDS or failed to collect TCS.
Example :A persons has deducted TDS on 10th May 2013 then TDS return for this period becomes due on 15th July, 2013 in case of other than Govt. department and 31st July,2013 in case of Government Department. Here, if the tds return (statement) is filed on 5th Nov., 2013 then there is a delay of 112 days in case of other than Government Department deductor, but if this TDS was failed to be deducted on 10th May 2013 and later on deducted on 12th August, 2013, then this tds has to be deposited on 7th Sept.,2013 and tds return for this (second) quarter has to be deposited on or before 15th Oct., 2013.
Section 200(3) of the act also says that tds statement shall be filed after paying the tax deducted and rule 31A also covers cases where deduction is made under section 192 to section 196D, so it does not impose liability to file tds statement for tax deductible but not deducted at all.
Law has not made any person responsible for defaults u/s 234E
On the other hand it is also pertinent to note that the law has not made any person responsible, to deposit late fee, in case of default in depositing late fee along with tds statement, which can be inferred from the provisions of Sec. 204 of the act, which states as under:-
Sec. 204 of the act says:- For the purposes of [the foregoing provisions of this Chapter i.e. Sec. 190 to Sec. 203AA] and Section 285 the expression "person responsible for paying" means”, this phrase does not cover Section 234E.
Therefore it is clear that section 204 says that for the purpose of Sec. 234E none of the person has been made responsible, therefore if any late fee is due and not deposited alongwith the tds statement none can be held responsible to deposit it.
Demand can not be raised for Late fees deposit by processing the returns
Demand of late fee cannot be raised also by way of processing of TDS statement, because Sec 200A(1) of the act talks about tds returns by a persons deducting any tds, so it does not cover cases of tax deductible but not deducted at all, the provisions of Sec. 200A of the act also does not permit processing tds statement for default in payment of late fee, except any arithmetical error, or incorrect claim, or default in payment of interest, any tds payable or refundable etc. Section 200A also does not cover processing in cases of tax deductible(TCS) or collectible at source (TCS).
In view of the above it is my opinion that late fee cannot be recovered later on, by way of any notice , neither notice of demand U/s 156 can be issued for this. If any notice is issued by way of processing tds statement U/s 200A, then apply for rectification of mistake U/s 154 of the act or directly file an appeal before Commissioner of Income Tax (Appeals).
CA RAJESH MEHTA
203 MANAS BHAWAN EXTN.,
11 RNT MARG, Near Hotel Shreemaya,
INDORE (M.P.) 452001