High court's relief for employers, businessmen from paying penal fees for not filing TDS
Justice Jawad Rahim passed an interim order to this affect while asking Income Tax department and ministry of finance to file their replies.
Several employers as well as assessees under TAN have moved the court challenging the penal provisions under newly inserted section 234E of the Income Tax Act , 1961 connected to filing of TDS returns by employers.
"If they continue defaulting section 234E of the Act, then they would be further subjected rigorous penal provisions of having to shell out penalty at Rs.100 per day, as set out in Section 272A(2)(g), in case recipient/deductee claims credit of the TDS in his return of income tax" the petitioners have claimed.
The petitioners have stated that levy of fee is against the scheme of the Income Tax Act and the word 'fee' is an alien word by itself vis-a-vis the Income Tax Act.