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Levy of Late Fee on Delay in filing TDS Statement not Unconstitutional: Madras HC [Read Order]

April 3, 2020 4:59 pm| By : Mariya Paliwala 

The Madras High Court, in a recent ruling, held that the imposition of the late fee under section 234E of the Income Tax Act,1961on the ground of delay in the filing of the TDS statement is not violative of the provisions of the Constitution.

While considering a petition by the assessee, Qatalys Software Technologies Private Limited, the High Court held that the Parliament is competent to pass legislation on Taxes in Income under Entry 82 of the List I to the Seventh Schedule.Section 234E is not violative of any of the other provisions of the Income Tax Act or the Constitution of India.

The bench observed that the petitioner failed to show that Section 234E is manifestly arbitrary for it to be struck down.

The petitioners challenged the validity of Section 234E of the Income Tax Act, 1961. The demand notice raised by the Income Tax officer under Section 234E along with Section 220 (2) and 201 (1) (A) of the Income Tax Act, 1961 contending that Section 234 E is ultra vires the Constitution of India.

The division bench of the High Court of Madras consisting of Justice A.P. Sahi and Justice Subramonium Prasad held that the Indian Parliament is competent to pass legislation on Taxes in Income under Entry 82 of the List I to the Seventh Schedule. Section 234 E of the Income Tax Act, 1961is not violative of any of the other provisions of the Income Tax Act or the Constitution of India.