Is there High Court authority that the s.234E fee runs from 1 July 2012 whatever the 2015 amendment to s.200A did, and does paying the fee buy me out of s.271H penalty?
Yes on the first, no on the second. The Gujarat High Court held that s.234E is the charging provision and s.200A merely machinery, that a machinery provision cannot override a charging provision, and that even before 1 June 2015 the Revenue could always calculate and collect the fee. It also held, against Karnataka, that the s.234E fee is not in lieu of the s.271H penalty — the two are independent levies.
Decided by the High Court (Akil Kureshi J and Biren Vaishnav J) on 2017-06-20, reported as Special Civil Application No. 302 of 2014 (Gujarat High Court); cited in later judgments as (2017) 297 CTR 502 and as [2017] 85 taxmann.com 137. It bears on section 234E, section 200A, section 200A(1)(c), section 271H, section 271H(3), section 272A(2)(k), section 200(3), section 206C(3), section 154, section 246A of the Income Tax Act 1961, in TDS Defaults, How Tax Law Is Read and Penalty matters.
This is the leading Revenue-side judgment on the pre-June-2015 s.234E question and the one the Commissioners (Appeals) and CPC rely on. Two things in it repay attention beyond the headline. First, the Court's account of what the 2015 amendment actually achieved: bringing the fee within s.200A makes the resulting order rectifiable under s.154 and appealable under s.246A, which the Court says would otherwise have been arguable — so the amendment improved the deductor's remedies rather than creating the charge. Second, the Court rejected the reading that s.234E and s.271H are two halves of one scheme. Under s.271H(3) no penalty is levied if the deductor proves he paid the tax with fee and interest and delivered the statement within one year of the due date; Karnataka read that as making the fee the price of the s.271H escape, and built its prospectivity reasoning on it. Gujarat holds instead that both are independent levies and that s.271H(3) simply lays down conditions. That matters practically: paying the s.234E fee does not by itself extinguish s.271H exposure unless the one-year filing condition is also met, and conversely satisfying s.271H(3) does not refund the fee.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner was the proprietor of M/s SaiBaba Textiles, manufacturing and trading in ladies garments, who made payments requiring deduction of tax at source and was obliged to file periodic TDS statements under s.200(3) read with rule 31A of the Income-tax Rules. He filed a writ petition raising three grievances: that s.234E is ultra vires and unconstitutional; that rule 31A is discriminatory in prescribing a longer period for Government deductors to file statements than for everyone else; and that because s.200A did not before 1 June 2015 authorise the Assessing Officer to adjust the s.234E fee, no fee could be charged for the period between the introduction of s.234E and that date. An intimation purporting to be under s.200A had adjusted a sum of Rs 33,123 by way of late filing fee under s.234E. At the hearing the petitioner's counsel had instructions not to press the constitutional challenge, in view of the Bombay High Court's decision in Rashmikant Kundalia v. Union of India [2015] 373 ITR 268, and confined the argument to rule 31A and the machinery point, relying on the Karnataka High Court in Fatheraj Singhvi and on the Pune Bench of the Tribunal in Gajanan Constructions. The department relied on the Rajasthan High Court in Dundlod Shikshan Sansthan.
The petition was dismissed. Rule 31A(2), in giving Government offices 15 days more than other deductors to file quarterly statements, is a reasonable classification and not discrimination under Article 14 (para 15). On the central question, s.200A is a machinery provision and s.234E is a charging provision; a machinery provision can under no circumstances override or overrule a charging provision, and s.200A creates no charge (para 19). Even in the absence of s.200A it was always open to the Revenue to demand and collect the fee for late filing; if anything the recast clause (c) of s.200A(1) is clarificatory, and even before 1 June 2015 it was always open to the Revenue to calculate fee in terms of s.234E (para 20). The Court expressly declined to concur with Fatheraj Singhvi both on the proposition that s.200A confers substantive power and on the proposition that the s.234E fee is in lieu of the s.271H penalty, holding that s.200A is not a source of substantive power and that the fee and the penalty are independent levies (para 20).
The Court traced the legislative sequence (para 16): before 1 July 2012 the only sanction for failure to file the statement was penalty under s.272A(2)(k) at Rs 100 a day; with effect from that date the legislature introduced s.234E charging fee at Rs 200 a day capped at the tax deductible or collectible, introduced s.271H prescribing penalty between Rs 10,000 and Rs 1,00,000 with the s.271H(3) escape, and added a proviso confining s.272A(2)(k) to the period up to 1 July 2012. Section 234E therefore prescribed for the first time a fee for every day of default, added to make TDS compliance more stringent (para 17). Section 200A, by contrast, provides the procedure for processing a statement and authorises only prima facie or arithmetical adjustments, and the recast clause (c) permits the authority to compute the fee and clause (d) to adjust it (para 18). From that structure the Court drew the conclusion that s.234E is the charge and s.200A the machinery (para 19). It identified one concrete consequence of the amendment: an order under s.200A is rectifiable under s.154 and appealable under s.246A, and in the absence of power to make the adjustment under s.200A it could be argued that a calculation of fee would not partake of the character of an intimation and so would not be open to rectification or appeal — a situation the recast clause obviates (para 20). B.C. Srinivasa Setty was distinguished as decided in an entirely different background, concerning a capital asset in the acquisition of which no cost can be conceived (para 21).
Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner.
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Handle my notice → Ask a CA on WhatsAppYes on the first, no on the second. The Gujarat High Court held that s.234E is the charging provision and s.200A merely machinery, that a machinery provision cannot override a charging provision, and that even before 1 June 2015 the Revenue could always calculate and collect the fee. It also held, against Karnataka, that the s.234E fee is not in lieu of the s.271H penalty — the two are independent levies. This was decided by the High Court (Akil Kureshi J and Biren Vaishnav J) and bears on section 234E, section 200A, section 200A(1)(c), section 271H, section 271H(3), section 272A(2)(k), section 200(3), section 206C(3), section 154, section 246A of the Income Tax Act 1961. It is reported as Special Civil Application No. 302 of 2014 (Gujarat High Court); cited in later judgments as (2017) 297 CTR 502 and as [2017] 85 taxmann.com 137. This is the leading Revenue-side judgment on the pre-June-2015 s.234E question and the one the Commissioners (Appeals) and CPC rely on. Two things in it repay attention beyond the headline. First, the Court's account of what the 2015 amendment actually achieved: bringing the fee within s.200A makes the resulting order rectifiable under s.154 and appealable under s.246A, which the Court says would otherwise have been arguable — so the amendment improved the deductor's remedies rather than creating the charge. Second, the Court rejected the reading that s.234E and s.271H are two halves of one scheme. Under s.271H(3) no penalty is levied if the deductor proves he paid the tax with fee and interest and delivered the statement within one year of the due date; Karnataka read that as making the fee the price of the s.271H escape, and built its prospectivity reasoning on it. Gujarat holds instead that both are independent levies and that s.271H(3) simply lays down conditions. That matters practically: paying the s.234E fee does not by itself extinguish s.271H exposure unless the one-year filing condition is also met, and conversely satisfying s.271H(3) does not refund the fee. If it applies to you, the first step is this: If your Assessing Officer is in Gujarat, Rajasthan, Tamil Nadu or any State whose High Court follows this line, treat the pre-June-2015 machinery argument as closed and put your effort into the s.234E(2) cap and the arithmetic of the days of delay.
The petitioner was the proprietor of M/s SaiBaba Textiles, manufacturing and trading in ladies garments, who made payments requiring deduction of tax at source and was obliged to file periodic TDS statements under s.200(3) read with rule 31A of the Income-tax Rules. He filed a writ petition raising three grievances: that s.234E is ultra vires and unconstitutional; that rule 31A is discriminatory in prescribing a longer period for Government deductors to file statements than for everyone else; and that because s.200A did not before 1 June 2015 authorise the Assessing Officer to adjust the s.234E fee, no fee could be charged for the period between the introduction of s.234E and that date. An intimation purporting to be under s.200A had adjusted a sum of Rs 33,123 by way of late filing fee under s.234E. At the hearing the petitioner's counsel had instructions not to press the constitutional challenge, in view of the Bombay High Court's decision in Rashmikant Kundalia v. Union of India [2015] 373 ITR 268, and confined the argument to rule 31A and the machinery point, relying on the Karnataka High Court in Fatheraj Singhvi and on the Pune Bench of the Tribunal in Gajanan Constructions. The department relied on the Rajasthan High Court in Dundlod Shikshan Sansthan. The matter was decided on 2017-06-20 by the High Court (Akil Kureshi J and Biren Vaishnav J). On those facts the High Court held as follows. The petition was dismissed. Rule 31A(2), in giving Government offices 15 days more than other deductors to file quarterly statements, is a reasonable classification and not discrimination under Article 14 (para 15). On the central question, s.200A is a machinery provision and s.234E is a charging provision; a machinery provision can under no circumstances override or overrule a charging provision, and s.200A creates no charge (para 19). Even in the absence of s.200A it was always open to the Revenue to demand and collect the fee for late filing; if anything the recast clause (c) of s.200A(1) is clarificatory, and even before 1 June 2015 it was always open to the Revenue to calculate fee in terms of s.234E (para 20). The Court expressly declined to concur with Fatheraj Singhvi both on the proposition that s.200A confers substantive power and on the proposition that the s.234E fee is in lieu of the s.271H penalty, holding that s.200A is not a source of substantive power and that the fee and the penalty are independent levies (para 20).
The Court traced the legislative sequence (para 16): before 1 July 2012 the only sanction for failure to file the statement was penalty under s.272A(2)(k) at Rs 100 a day; with effect from that date the legislature introduced s.234E charging fee at Rs 200 a day capped at the tax deductible or collectible, introduced s.271H prescribing penalty between Rs 10,000 and Rs 1,00,000 with the s.271H(3) escape, and added a proviso confining s.272A(2)(k) to the period up to 1 July 2012. Section 234E therefore prescribed for the first time a fee for every day of default, added to make TDS compliance more stringent (para 17). Section 200A, by contrast, provides the procedure for processing a statement and authorises only prima facie or arithmetical adjustments, and the recast clause (c) permits the authority to compute the fee and clause (d) to adjust it (para 18). From that structure the Court drew the conclusion that s.234E is the charge and s.200A the machinery (para 19). It identified one concrete consequence of the amendment: an order under s.200A is rectifiable under s.154 and appealable under s.246A, and in the absence of power to make the adjustment under s.200A it could be argued that a calculation of fee would not partake of the character of an intimation and so would not be open to rectification or appeal — a situation the recast clause obviates (para 20). B.C. Srinivasa Setty was distinguished as decided in an entirely different background, concerning a capital asset in the acquisition of which no cost can be conceived (para 21). In the words reproduced by the source cited on this page: "Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner." The decision followed or applied Dundlod Shikshan Sansthan v. Union of India [2015] 63 taxmann.com 243 (Rajasthan) — relied on by the department and approved in substance; Rashmikant Kundalia v. Union of India [2015] 373 ITR 268 (Bom) — the reason the constitutional challenge was not pressed; Fatheraj Singhvi v. Union of India [2016] 73 taxmann.com 252 (Karnataka) — considered and expressly dissented from; CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC) — distinguished; Gajanan Constructions v. DCIT, CPC (TDS) [2016] 73 taxmann.com 380 (Pune Trib.) — relied on by the petitioner, not accepted.
It was decided by the High Court on 2017-06-20 and is reported as Special Civil Application No. 302 of 2014 (Gujarat High Court); cited in later judgments as (2017) 297 CTR 502 and as [2017] 85 taxmann.com 137. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 234E, section 200A, section 200A(1)(c), section 271H, section 271H(3), section 272A(2)(k), section 200(3), section 206C(3), section 154, section 246A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The petition was dismissed. Rule 31A(2), in giving Government offices 15 days more than other deductors to file quarterly statements, is a reasonable classification and not discrimination under Article 14 (para 15). On the central question, s.200A is a machinery provision and s.234E is a charging provision; a machinery provision can under no circumstances override or overrule a charging provision, and s.200A creates no charge (para 19). Even in the absence of s.200A it was always open to the Revenue to demand and collect the fee for late filing; if anything the recast clause (c) of s.200A(1) is clarificatory, and even before 1 June 2015 it was always open to the Revenue to calculate fee in terms of s.234E (para 20). The Court expressly declined to concur with Fatheraj Singhvi both on the proposition that s.200A confers substantive power and on the proposition that the s.234E fee is in lieu of the s.271H penalty, holding that s.200A is not a source of substantive power and that the fee and the penalty are independent levies (para 20). It arises in TDS Defaults, How Tax Law Is Read and Penalty matters, on section 234E, section 200A, section 200A(1)(c), section 271H, section 271H(3), section 272A(2)(k), section 200(3), section 206C(3), section 154, section 246A of the Income Tax Act 1961, and was decided by Akil Kureshi J and Biren Vaishnav J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Use paragraph 20 affirmatively when the department argues that an intimation levying s.234E fee is not appealable: the Court's own reasoning is that the recast clause (c) brought the fee within s.200A precisely so that the order is rectifiable under s.154 and appealable under s.246A. For s.271H exposure, work the s.271H(3) conditions separately from the fee — tax deducted or collected paid to the credit of the Government together with fee and interest, and the statement delivered within one year of the prescribed time. Paying the fee alone is not enough on this Court's reading. Do not repeat the argument, rejected here, that the absence of a machinery provision makes the levy fail under B.C. Srinivasa Setty; the Court distinguished that decision as concerned with a capital asset having no conceivable cost of acquisition. Drop any Article 14 challenge to the extra 15 days rule 31A gives Government deductors — it was held to be reasonable classification, not discrimination.
High Courts differ on this point. Followed by the Madras High Court in Conceria International P Ltd v. ITO (W.P. No.16934 of 2021, 10 November 2023), which reproduced paras 19 and 20 of this judgment. Directly contrary to the Karnataka High Court in Fatheraj Singhvi (2016) and to the Kerala line (Sarala Memorial Hospital, applied in Sajeev Mathew and Company, 30 November 2021). I did not check whether a special leave petition against this judgment was filed or decided, and no Supreme Court decision resolving the split was located. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The report is unusually careless with dates and section numbers and a reader should be warned. Paragraph 9 twice writes 'section 200E' where s.234E is plainly meant. Paragraph 12 says s.234E was introduced by the Finance Act 2012 'with effect from 01.07.2015' — wrong; para 3 of the same judgment and s.234E(4) both give 1 July 2012. Paragraph 16 says 'With effect from 01.06.2012, three major changes were introduced' where 1 July 2012 is meant. The petitioner's own ground as recorded in para 5(III) contains two further slips ('01.03.2016' and '01.07.2002'). Paragraph 14, which sets out pre-2015 s.200A(1), reproduces two overlapping clauses lettered (e) and (f) and one clause reads 'clause ©' for clause (c). None of these touch the ratio, which is stated cleanly in paras 19 to 21. The judgment is recorded as an ORAL JUDGMENT delivered by Kureshi J for the Bench. Constitutional challenge to s.234E was not pressed (para 6), so this judgment decides nothing on vires. I did not retrieve Fatheraj Singhvi v. Union of India in its own text — it is not on indiankanoon, casemine returns 403 and the itatonline copy is a scanned PDF. Everything said in this entry about what the Karnataka High Court held, and the citation given for it in the followed list, is what this judgment records of it and not a reading of it. That citation, [2016] 73 taxmann.com 252, has not itself been checked against the printed report of this judgment, and the companion entry on Conceria International gives a different citation for the same decision (142 DTR 0281 (Kar)); at least one of the two was supplied rather than read off the page, so neither should be reproduced in a submission without being checked first. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The petition was dismissed. Rule 31A(2), in giving Government offices 15 days more than other deductors to file quarterly statements, is a reasonable classification and not discrimination under Article 14 (para 15). On the central question, s.200A is a machinery provision and s.234E is a charging provision; a machinery provision can under no circumstances override or overrule a charging provision, and s.200A creates no charge (para 19). Even in the absence of s.200A it was always open to the Revenue to demand and collect the fee for late filing; if anything the recast clause (c) of s.200A(1) is clarificatory, and even before 1 June 2015 it was always open to the Revenue to calculate fee in terms of s.234E (para 20). The Court expressly declined to concur with Fatheraj Singhvi both on the proposition that s.200A confers substantive power and on the proposition that the s.234E fee is in lieu of the s.271H penalty, holding that s.200A is not a source of substantive power and that the fee and the penalty are independent levies (para 20).
TaxSphere, “Rajesh Kourani v Union of India”, https://taxnotice.vittsphere.com/caselaw/case/rajesh-kourani-v-uoi-234e-charging-section-200a-machinery/ (validity last checked 2026-09-07)
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The CIT(A) has confirmed my pre-June-2015 s.234E fee by following the Gujarat High Court, even though my jurisdictional High Court has decided the other way. Is the Tribunal bound to follow my own High Court?
The TDS officer has levied a penalty for a late quarterly statement. Which section applies — the daily penalty in section 272A(2)(k) or section 271H — and what gets me out of it?
CPC has charged s.234E fee in a s.200A intimation for TDS quarters going back to 2010-11. My consultant says the Karnataka High Court struck that down. Does that help me in Tamil Nadu?
I have a single consolidated s.234E demand covering 2011-12 right through to 2021-22. Can the old part be knocked out, and can I do it by writ?
