Late Fee u/s 234E deleted as assessee was senior citizen & had deposited TDS immediately

Late Fee u/s 234E deleted as the assessee was a senior citizen and had deposited TDS amount immediately and delay in filing TDS return was on account of human error due to old age

In a recent decision, ITAT deleted late fee u/s 234E where the assessee was a senior citizen and had deposited TDS amount immediately

ABCAUS Case Law Citation:
ABCAUS 3774 (2023) (06) ITAT

In the instant case, the assessee had challenged the revisionary order passed National Faceless Appeal Centre (NFAC) in approving the levy of late filing fees u/s 234E of the Income Tax Act, 1961 (the Act) by the Assessing Officer (AO) TRACES on account of late filing of quarterly TDS returns.

The assessee was a resident senior citizen aged 85 years. During the year under consideration the assessee purchased a house property which was jointly co-owned. Both the co-owners of the house property were non-residents in India during the year under consideration and thus the assessee deducted tax at source on the sale consideration as per provision of Section 195 of the Income Tax Act, 1961.

Both the non-resident sellers of the property obtained lower tax certificate from their respective jurisdiction Assessing Officer as per provisions of Section 197 of the Act.

The assessee on the date of payment/credit of sale Consideration, deposited the total TDS amount to the account of the Central Government on the same day without any delay days before the due date for deposit of TDS.

However, Due to very old age, the assessee on account of human error forgot to file the TDS return in Form 27Q by the end of the month following the quarter in which TDS is deducted. Due to weak health and thereafter on account of outbreak of Covid-19, the assessee came to know of his default only after a gap of eighteen months that the TDS return was not filed by him and accordingly the assessee arranged to file the said return immediately thereafter.

The return filed in Form 27Q was processed by the Assessing Officer TRACES and intimation under Section 200A of the Act was issued after levying of large amount of late filing fees as per section 234E of the Act.

Before the Tribunal, the assessee submitted that the delay in filing the TDS return was just on account of human error due to old age and with no malafide intention of being non-co-operative to income tax compliances.

The Tribunal observed that the assessee being senior citizen had deposited TDS amount immediately after sale consideration was received and there was no lapse on the part of the assessee while depositing the TDS amount to the Treasury of Government of India. Due to the circumstances, the assessee could not file form 27Q within the time frame, but the assessee’s intention is clear as the assessee filed the same later.

The Tribunal opined that merely on the ground that the assessee had not filed Form 27Q with due date and thus late filing cannot be the criteria for levying fees under Section 234E of the Act.

Accordingly, the Tribunal deleted the levy of late fee u/s 234E and allowed the appeal of the assessee.

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