Saturday, March 1, 2014

Stay on Levy U/S.234E by Karnataka High Court - Constitutional Validity Questioned

Adithya Bizorp Solutions India Pvt. Ltd vs. UOI (Karnataka High Court)

Sec 234E: High Court grants interim stay on enforcement of notices for levy of fee for failure to file TDS statement

S. 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day’s delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). 

The constitutional validity of s. 234E has been challenged in the Karnataka High Court. Vide an interim order dated 19.02.2014 the High Court held as follows:

"Petitioners have questioned the constitutional validity of the provision of Sec. 234E of the Income Tax Act and a notice to the petitioner levying fee vide Annexure A1 to A21 and Annexure - B.  Pending consideration of the grounds in the writ petition, it is desirable that enforcement of notices referred to above issued by the 4th respondent are stayed until further orders".

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