TITLE:
S. 234E: High Court grants ad-interim stay against operation of notices levying
fee for failure to file TDS statement
CASE:
Rashmikant Kundalia vs. UOI (Bombay High Court)
S. 234E of the Income-tax Act, 1961 inserted by the Finance
Act, 2012 provides for levy of a fee of Rs. 200/- for each day’s delay in
filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source
(TCS). A Writ Petition to challenge the validity of s. 234E has been filed in
the Bombay High Court.
The
Petition claims that assessees who are deducting tax at source are discharging
an administrative function of the department and that they are a “honorary
agent” of the department. It is stated that this obligation is onerous in
nature and that there are already numerous penalties prescribed for a default.
It is stated that the fee now levied by s. 234E is “exponentially harsh and
burdensome” and also “deceitful, atrocious and obnoxious“. It is also claimed
that Parliament does not have the jurisdiction or competence to impose such a
levy on tax-payers.
The
Bombay High Court has, vide order dated 28.04.2014, granted ad-interim stay in
terms of prayer clause (d) i.e. stayed the operation of the impugned notices
levying the fee.