Wednesday, December 18, 2013

Section 234E of the Income Tax Act- Legality and Validity challenged in the High Court of Kerala

The legality and validity of section 234 E of the Income Tax Act, 1961 inserted by the Finance Act, 2012 making a person liable to pay, by way of fee, a sum of Rs 200/-for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) is challenged in the High Court of Kerala. The levy in the nature of 'fee' has been challenged as illegal, arbitrary, unreasonable, invalid and unconstitutional, in a writ petition filed by a Lower Primary School in Kannur.
The Honourable High Court has admitted the writ petition and has stayed all the proceedings initiated against the petitioner under section 234E of the Income Tax Act for a period of two months. The standing counsel for the Income Tax department took notice for all the respondents in the writ petition. 
The copy of the interim order passed by the Honourable High Court in the above matter is given below:
Vide order dated 14-2-2014, the Honourable Court extended the interim order by further 6 weeks. Thereafter on 27th March 2014, the stay has been further extended by 2 months. The copy of the interim order dated 27th March 2014 is given below: