The Central Government issued Notification No A.50050/112/2015-Ad.I dated 27th October, 2015 constituting a 10-Member Committee under the chairmanship of Justice R.V. Easwar, Former Judge of the Delhi High Court and Former President of the Income Tax Appellate Tribunal with the following broad objectives:
- (i) to study and identify the provisions/phrases in the Income Tax Act which have given rise to litigation on account of interpretative differences;
- (ii) to study and identify the provisions which impact the ease of doing business;
- (iii) to study and identify the provisions of the Act for simplification in light of the existing jurisprudence, and
- (iv) to suggest alternatives or modifications with a view to ensuring certainty and predictability in tax laws without substantially impacting the tax base or revenue collections.
The Committee has been given a term of one year from the date of its constitution. The first batch of recommendations is to be submitted by 31st January, 2016.Recently the committee has released it Draft report,which have covered many aspects ,we have covered one from them ,which is late fee Rs 200 per day for default in furnishing TDS and TCS statement.
234E FOR DEFAULT IN FURNISHING STATEMENTS OF TDS AND TCS FROM RS.200/- PER DAY TO RS.100/- PER DAY
The levy of mandatory fee u/s. 234E at the rate of Rs.200/- per day for default in furnishing of Statements of TDS u/s. 200(3) and TCS u/s. 206C(3) has been a matter of debate ever since it came to be introduced with effect from 1.7.2012. While in principle, courts have justified the levy as being constitutional, it is widely believed that this levy is harsh keeping in view the fact that the person committing any default for delayed deduction or payment of tax is already inflicted with penal interest of 12% or 18% per annum. Moreover, in cases of grave default of non-furnishing of such Statements beyond one year, there is also a provision for levy of penalty of Rs.10,000/- to Rs.1,00,000/-.
In fact, prior to the introduction of this mandatory levy, the penalty for similar defaults as provided u/s. 272A(2)(k) was imposable at Rs.100/-per day. In cases of any default by a Government Office, while there is no provision for levy of fee u/s. 234E, the penalty for similar defaults u/s. 272A(2)(m) is prescribed at Rs.100/- per day. In view of the above, there is a case for reduction of the fee u/s. 234E from Rs.200/- per day to Rs.100/- per day.
19.2 Accordingly, it is recommended that sub-section (1) of Section 234E be amended as follows:
“234E. (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of one hundred rupees for every day during which the failure continues.”