Draft appeal for notice received u/s 200A for late Fees u/s 234E for late deposit of TDS return


As you may aware of that Late fees 200 per day is applicable u/s 234E for late filing of TDS return . Department has issued intimation u/s 200A to assesses to deposit the Late fees of Rs 200/- per day for late filing of tds return along with other deficiency in the tds return filed.As we have earlier informed you that The constitutional validity of s. 234E has been challenged in the Kerala High Court. Vide an interim order dated 18.12.2013, the High Court has admitted the Petition and granted a stay of proceedings for a period of two months. 

CA Rajesh Mehta Ji has prepared a Draft appeal against such intimation which may be helpful for you.

Before preparing for appeal read the following points :-

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 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 service of notice U/s 200A.

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 other 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.

Before the Hon’ble Commissioner of Income Tax (Appeals)-I, Indore

In the case of Govt. college


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

31th Oct 2012
           *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.

Before the Hon’ble Commissioner of Income Tax (Appeals)-I, Indore

In the case of Govt. college

A.Y. 2013-14

TAN :- B P L G 0 3 4  ---


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.
9) The appellant craves leave to add, alter or withdraw any of the grounds of appeal.

                                                      Thanking You


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.

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