Levy of fees u/s 234E is mandatory in nature and cannot be imposed as per discretion of AO

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Levy of fees u/s 234E is mandatory in nature and cannot be imposed as per discretion of AO

Block Development Officer v. ACIT – [2020] 117 taxmann.com 337 (Jaipur – Trib.)
Assessee made various payments and deducted tax thereon.
However, the TDS statements were not submitted in time. Assessing Officer (AO) made adjustments towards late fee under section 234E.
Assessee filed an appeal before CIT(A). Assessee contended that AO was not justified in levying late fee under section 234E when tax was deducted and paid to the account of the Central government within time, but statement was not furnished by the due date due to certain circumstances.
CIT(A) upheld the order passed by AO.
Assessee submitted that it was having limited human resources and only one accountant.
 It was almost impossible to spare time for submitting TDS statements as it required professional help and consultation.
Thus, due to paucity of staff and technical knowledge, there was delay in submitting TDS statements.
Therefore, default in submitting TDS statements was neither willful nor deliberate but due to unavoidable circumstances.
On appeal, Jaipur ITAT held that section 200A envisages the method and various adjustment which are required to be made while processing TDS statement and issuing intimation.
 It provides for adjustment on account of fee to be computed in accordance with the provision of Section 234E.
 Therefore, in case of default or delay in submitting TDS statements, late fee is levied as contemplated under section 234E and AO shall adjust this account while processing the statement.
Thus, the ITAT held that the nature of levy under section 234E is mandatory and AO has no discretion to take its own decision but he has to adjust in case of delay in submitting TDS statement.


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