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2017 (5) TMI 1 - AT - Income TaxLevy of fees for delay in filing the TDS return U/s 234E - Held that:- The timely processing of returns is the bedrock of an efficient tax administration system. If the income tax returns, especially having refund claims, are not processed in a timely manner, then (i) a delay occurs in the granting of credit of TDS to the person on whose behalf tax is deducted (the deductee) and consequently leads to delay in issuing refunds to the deductee, or raising of infructuous demands against the deductee; (ii) the confidence of a general taxpayer on the tax administration is eroded; (iii) the late payment of refund affects the Government financially as the Government has to pay interest for delay in granting the refunds; and (iv) the delay in receipt of refunds results into a cash flow crunch, especially for business entities. Looking at this from this perspective, we are clearly of the view that section 234E of the Act is not punitive in nature but a fee which is a fixed charge for the extra service which the Department has to provide due to the late filing of the TDS statements. See case of M/s Dundlod Shikshan Sansthan & ors. [2015 (9) TMI 807 - RAJASTHAN HIGH COURT ] - There is no valid reason or justification to interfere with the compensatory fees imposed for late filing of TDS return. Accordingly the demand raised by AO for late filing fees u/s 234E is confirmed. - Decided against assessee
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