Shanti Prime Publication Pvt. Ltd.
Section 234E of the Income Tax Act, 1961 – TDS – The Court must, make every effort to uphold the constitutional validity of a statute, even if that requires giving the statutory provision a strained meaning, or narrower or wider meaning, than what appears on the face of it.
Facts: Writ Petition challenging the demand notices raised by the revenue against them under Section 234 E along with Section 220 (2) and 201 (1) (A). It was submitted by assessee that Section 234 E of the Income Tax Act is penalty in the shape of a fee.
Held, that Revenue is right in contending that Section 234 (E) is not a penalty. Penalty is levied under Section 271 (H) and is not automatic. Penalty is levied only when tax is deducted at source along with interest fee is not deposited and statement is not filed within one year. If the above two conditions are satisfied, then penalty is not leviable.The revenue is right in contending that Section 234 (E) is meant to ensure that assessee files the statement in time, so that the Department can clear the returns of the persons connected with the assessee, i.e., from whom tax has been deducted at source without any delay and accurately with increasing or overloading the burden of the department. The Court must, make every effort to uphold the constitutional validity of a statute, even if that requires giving the statutory provision a strained meaning, or narrower or wider meaning, than what appears on the face of it. Parliament is competent to pass legislation on Taxes in Income under Entry 82 of the List I to the Seventh Schedule. Section 234 E is not violative of any of the other provisions of Income Tax Act or the Constitution of India. Nothing has been shown as to how the Section is manifestly arbitrary for it to be struck down. Thus, the writ petition fail and are hereby dismissed. Since the levy is constitutional, the challenge to the demand notices also fail – QATALYS SOFTWARE TECHNOLOGIES PRIVATE LIMITED Vs. UOI [2020] 424 ITR 143 (MAD)