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?
In Kerala, yes. The High Court quashed the demand notice to the extent it charged fee under s.234E for the period from 2011-12 up to 1 June 2015, holding that the insertion of clauses (c) to (f) in s.200A(1) took effect only from that date and is prospective. The rest of the demand was left standing.
Decided by the High Court (Bechu Kurian Thomas J) on 2021-11-30, reported as W.P.(C) No.24533 of 2021 (Kerala High Court). No ITR/CTR citation was located.. It bears on section 234E, section 200A, section 200A(1)(c), section 200(3), section 206C(3) of the Income Tax Act 1961, in TDS Defaults, How Tax Law Is Read and Appeals matters.
Two practical points, both about how to run the case rather than what the law is. First, the relief is partial and surgical — the Court did not quash the notice, it quashed it 'to the extent' it demanded fee for the pre-June-2015 period, which is the right prayer to draft when a single CPC communication rolls up a decade of quarters into one figure. Second, the route was a writ petition admitted and disposed of on the day of admission, not an appeal, and the Court treated the earlier Kerala decision in Sarala Memorial Hospital as final and binding on the authorities. Where a High Court decision on this point binds your officer, the CPC intimation is amenable to Article 226 without exhausting the s.246A appeal. Be aware the judgment is very short: it reasons entirely by reference to Sarala Memorial Hospital and does not itself analyse s.200A or s.234E, so it is best cited alongside the decision it follows rather than on its own.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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By notice dated 24 September 2021 (Ext.P1) the petitioner firm was called upon to pay Rs 4,02,150 by way of late filing fee under s.234E for the periods from 2011-12 to 2021-22, for failure to file statements of tax deducted at source. The petitioner's case was that although s.234E was introduced by the Finance Act 2012 with effect from 1 July 2012, clauses (c) to (f) were incorporated in s.200A(1) only with effect from 1 June 2015, and that until that date it could not be saddled with any liability to late fee for non-filing of a TDS statement. Counsel drew the Court's attention to its earlier decision in M/s. Sarala Memorial Hospital v. Union of India and Another, W.P.(C) No.37775 of 2018, in which an identical question had arisen and in which, after considering the statutory provisions and the implications of the amendment, it was held that the amendment takes effect only from 1 June 2015 and is prospective; it was submitted that that judgment had become final and was binding on the authorities. The writ petition came up for admission on 30 November 2021 and was disposed of the same day.
The demand in Ext.P1 for the period from 2011-12 was held to be bereft of authority and not legally sustainable, and the notice was quashed to the extent it demanded fee under s.234E for the period from 2011-12 till 1 June 2015. The writ petition was allowed to that extent (paras 6 and 7).
The Court set out s.234E(1) and then turned to s.200A, recording that s.200A(1) incorporated clauses (c) to (f) with effect from 1 June 2015 and that the petitioner's claim was that until that date it could not be mulcted with liability to late fee (paras 2 and 3). It accepted the submission that the question was identical to the one decided in Sarala Memorial Hospital, where the Court had held after considering the statutory provisions and the implications of the amendment that the amendment takes effect only from 1 June 2015 and is prospective in nature, and that the decision had become final and was binding on the authorities (para 5). 'In view of the above', the demand for the earlier period was held to be without authority (para 6). No independent analysis of the charging-versus-machinery question was undertaken.
Accordingly, I quash Ext.P1 notice to the extent it demands fee under section 234E for the period from 2011-12 till 01.06.2015.
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Handle my notice → Ask a CA on WhatsAppIn Kerala, yes. The High Court quashed the demand notice to the extent it charged fee under s.234E for the period from 2011-12 up to 1 June 2015, holding that the insertion of clauses (c) to (f) in s.200A(1) took effect only from that date and is prospective. The rest of the demand was left standing. This was decided by the High Court (Bechu Kurian Thomas J) and bears on section 234E, section 200A, section 200A(1)(c), section 200(3), section 206C(3) of the Income Tax Act 1961. It is reported as W.P.(C) No.24533 of 2021 (Kerala High Court). No ITR/CTR citation was located.. Two practical points, both about how to run the case rather than what the law is. First, the relief is partial and surgical — the Court did not quash the notice, it quashed it 'to the extent' it demanded fee for the pre-June-2015 period, which is the right prayer to draft when a single CPC communication rolls up a decade of quarters into one figure. Second, the route was a writ petition admitted and disposed of on the day of admission, not an appeal, and the Court treated the earlier Kerala decision in Sarala Memorial Hospital as final and binding on the authorities. Where a High Court decision on this point binds your officer, the CPC intimation is amenable to Article 226 without exhausting the s.246A appeal. Be aware the judgment is very short: it reasons entirely by reference to Sarala Memorial Hospital and does not itself analyse s.200A or s.234E, so it is best cited alongside the decision it follows rather than on its own. If it applies to you, the first step is this: Draft the prayer as a partial quashing — 'to the extent it demands fee under section 234E for the period up to 01.06.2015' — rather than asking for the whole intimation to be set aside, which is what the Court actually granted here.
By notice dated 24 September 2021 (Ext.P1) the petitioner firm was called upon to pay Rs 4,02,150 by way of late filing fee under s.234E for the periods from 2011-12 to 2021-22, for failure to file statements of tax deducted at source. The petitioner's case was that although s.234E was introduced by the Finance Act 2012 with effect from 1 July 2012, clauses (c) to (f) were incorporated in s.200A(1) only with effect from 1 June 2015, and that until that date it could not be saddled with any liability to late fee for non-filing of a TDS statement. Counsel drew the Court's attention to its earlier decision in M/s. Sarala Memorial Hospital v. Union of India and Another, W.P.(C) No.37775 of 2018, in which an identical question had arisen and in which, after considering the statutory provisions and the implications of the amendment, it was held that the amendment takes effect only from 1 June 2015 and is prospective; it was submitted that that judgment had become final and was binding on the authorities. The writ petition came up for admission on 30 November 2021 and was disposed of the same day. The matter was decided on 2021-11-30 by the High Court (Bechu Kurian Thomas J). On those facts the High Court held as follows. The demand in Ext.P1 for the period from 2011-12 was held to be bereft of authority and not legally sustainable, and the notice was quashed to the extent it demanded fee under s.234E for the period from 2011-12 till 1 June 2015. The writ petition was allowed to that extent (paras 6 and 7).
The Court set out s.234E(1) and then turned to s.200A, recording that s.200A(1) incorporated clauses (c) to (f) with effect from 1 June 2015 and that the petitioner's claim was that until that date it could not be mulcted with liability to late fee (paras 2 and 3). It accepted the submission that the question was identical to the one decided in Sarala Memorial Hospital, where the Court had held after considering the statutory provisions and the implications of the amendment that the amendment takes effect only from 1 June 2015 and is prospective in nature, and that the decision had become final and was binding on the authorities (para 5). 'In view of the above', the demand for the earlier period was held to be without authority (para 6). No independent analysis of the charging-versus-machinery question was undertaken. In the words reproduced by the source cited on this page: "Accordingly, I quash Ext.P1 notice to the extent it demands fee under section 234E for the period from 2011-12 till 01.06.2015." The decision followed or applied M/s. Sarala Memorial Hospital v. Union of India and Another, W.P.(C) No.37775 of 2018 (Kerala) — followed as binding and final.
It was decided by the High Court on 2021-11-30 and is reported as W.P.(C) No.24533 of 2021 (Kerala High Court). No ITR/CTR citation was located.. 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 200(3), section 206C(3), 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 taxpayer. The demand in Ext.P1 for the period from 2011-12 was held to be bereft of authority and not legally sustainable, and the notice was quashed to the extent it demanded fee under s.234E for the period from 2011-12 till 1 June 2015. The writ petition was allowed to that extent (paras 6 and 7). It arises in TDS Defaults, How Tax Law Is Read and Appeals matters, on section 234E, section 200A, section 200A(1)(c), section 200(3), section 206C(3) of the Income Tax Act 1961, and was decided by Bechu Kurian Thomas 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. Split the CPC demand quarter by quarter before you file. The line is drawn at 1 June 2015 by reference to the statement, so a demand spanning 2011-12 to 2021-22 has to be broken up before you can show the Court what falls on each side. Cite Sarala Memorial Hospital v. Union of India, W.P.(C) No.37775 of 2018, as the reasoned decision and this case as the application of it; on its own this judgment carries the outcome but not the analysis. Check first whether your Assessing Officer is in Kerala. In Gujarat, Rajasthan and Tamil Nadu the same argument has failed at High Court level, and a writ there will meet Rajesh Kourani and Conceria International. If the fee has already been paid, note the qualification the Karnataka High Court attached to the same result — a deductor who has already paid on an intimation cannot reopen the question unless he paid under protest. Nothing in this judgment displaces that caution.
High Courts differ on this point. On the same side: Fatheraj Singhvi v. Union of India (Karnataka, 2016), applied by the Bangalore Bench in Kooud Software Pvt. Ltd. (25 March 2022). Directly contrary: Rajesh Kourani v. Union of India (Gujarat, 20 June 2017), Dundlod Shikshan Sansthan (Rajasthan) and Conceria International P Ltd v. ITO (Madras, 10 November 2023). I did not check later treatment of this particular judgment, and no check was made for a special leave petition against this judgment, against Fatheraj Singhvi, or against Rajesh Kourani. I could not read Sarala Memorial Hospital, the decision it rests on; nor did I 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 — so what is said here about the Karnataka decision is what judgments that were read record of it, not a reading of it. 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 judgment is four substantive paragraphs long and was fetched twice; paras 5, 6 and 7 came back identically on both passes. Two things a reader should know. The judgment's own description of the statutory scheme in para 3 is garbled — it says 'Sub-clause to section 200A (1) refers to the fee if any to be computed in accordance with the provisions of section 200A(1)(e)', where the reference should be to s.234E; the correct proposition appears in the operative paras. And there is a mismatch in the two dispositive paragraphs: para 6 describes the unsustainable part of the demand as 'for the period from 2011-12 to 2015-16' while para 7 quashes the notice 'for the period from 2011-12 till 01.06.2015'. Para 7 is the operative order and 1 June 2015 is the date the reasoning turns on. I could not retrieve Sarala Memorial Hospital v. Union of India (W.P.(C) No.37775 of 2018) itself — it is not on indiankanoon under that title — so everything said here about its reasoning is what this judgment records of it. 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 demand in Ext.P1 for the period from 2011-12 was held to be bereft of authority and not legally sustainable, and the notice was quashed to the extent it demanded fee under s.234E for the period from 2011-12 till 1 June 2015. The writ petition was allowed to that extent (paras 6 and 7).
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