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2019 (1) TMI 604 - HC - Income TaxConstitutional validity of Section 234E - imposing a fee for delayed filing of statement of tax deducted at source (TDS returns) - whether levy under Section 234E of the Act is incorrectly and illegally described as ‘fee’ since it is levied mandatorily and automatically, without actually being in the nature of fee as understood in law? - Held that:- Fee imposed under Section 234E is levied towards regularisation of the delay in filing of a TDS return or statement, since the Income Tax Department has to expend extra effort and resources for processing delayed TDS returns or statements ; and possibly also incurs the additional burden of interest to be paid to the assessee on whose account tax deduction has been made. Describing the levy under Section 234E as a ‘fee’ does not invalidate the imposition made. We may also point-out the overarching principle that the manner of description of a levy, in this case, calling the levy made under Section 234E of the Act a ‘fee’, cannot be the sole basis of judging the true nature or validity of the levy. Section 234E affords a person deducting tax at source the evident benefit of relaxation of timelines for furnishing a statement of the tax so deducted. The fee imposed under Section 234E of the Act is for all intents and purposes a ‘late fee’ payable for accepting the TDS statement/return at a belated point in time. As a sequitur to the foregoing discussion, we hold that the provisions of Section 234E of the Act imposing a fee for delayed filing of statement of tax deducted at source are not ultravires the provisions of the Constitution. - Petition dismissed.
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