TDS STATEMENT LATE FEE U/s 234E CAN BE WAIVED ?
CA Rajesh Mehta Indore

One of the assessee had filed his tds statement for 1st quarter of F.Y. 2012-13 delayed by 260 days, he is in receipt of notice showing late fee of ` 200/- per day i.e. aggregate late fee of ` 52000/- for 260 days, regarding late fee on late filing of TDS statement.

Provisions of Sec. 234E has been made applicable w.e.f. 1st July, 2012. It states that “ Amount of late fee 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. The authorized TIN- NSDL centre which accepted the TDS statement also accepted these without late fee, as well as the software utility of the TDS department itself accepted these without late fee.

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 even for any reasonable.

As per provisions of Sec. 234E(4) late fee is applicable for “TDS statement which is to be delivered or caused to delivered for tax deducted at source or tax collected at source, as the case may be, on or after 1st July 2012”.

Late fee cannot be recovered for TDS statements which were due for F.Y. 2011-12 as well as TDS statement late fee cannot be recovered for F.Y. 2012-13, if not collected at the time of delivering TDS statement to the department.

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 alongwith tds statement, which can be inferred from the provisions of Sec. 204 of the act, which states as under:- “Sec. 204 of the act . For the purposes of [the oregoing provisions of this Chapter] and section 285, the expression "person responsible for paying" means—

  1. in the case of payments of income chargeable under the head "Salaries", other than payments by the Central Government or the Government of a State, the employer himself or, if the employer is a company, the company itself, including the principal officer thereof;

  2. in the case of payments of income chargeable under the head "Interest on securities", other than payments made by or on behalf of the Central Government or the Government of a State, the local authority, corporation or company, including the principal officer thereof;

[(iia) in the case of any sum payable to a non-resident Indian, being any sum representing consideration for the transfer by him of any foreign exchange asset, which is not a short-term capital asset, the [authorised person] responsible for remitting such sum to the non-resident Indian or for crediting such sum to his Non-resident (External) Account maintained in accordance with [the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder;]

  1. [in the case of credit, or, as the case may be, payment] of any other sum chargeable under the provisions of this Act, the payer himself, or, if the payer is a company, the company itself including the principal officer thereof;

  2. in the case of credit, or as the case may be, payment of any sum chargeable under the provisions of this Act made by or on behalf of the Central Government or the Government of a State, the drawing and disbursing officer or any other person, by whatever name called, responsible for crediting, or as the case may be, paying such sum.]”

The section 204 specifically says that “for the purposes of Sec. 190 to Sec. 203 and for Sec. 285 of the act the following persons would be responsible” , so it is clear 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 of late fee cannot be raised also by way of processing of TDS statement, because provisions of Sec. 200A of the act does not cover 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.

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. Any querries and suggestions are welcome on this issue.