Madras HC grants stay on recovery proceedings u/s 234E and restrains Revenue from giving effect to provisions of Sec 234E; Discusses distinction between a fee and a penalty; Highlights that Sec 234E does not speak about services rendered to a class of assessees, neither regulatory nor compensatory, in the nature of a penalty and not fee for services rendered;
Relies on SC decision in Ashwathanarayanan Setty vs. State of Karnataka, observes “fee” is distinct from “tax” or “penalty”; Contrasts Sec 271H (which provides for penalty not less than Rs 10,000 but which may extend to Rs 100,000 for failure to furnish statements) with Sec 234E (which provides for payment of fee of Rs 200 per day for the period assessee fails to deliver TDS statement) and expresses that Sec 234E prima facie appears to be “in the nature of penalty” for delay in delivering TDS statement : Madras HC
Relies on SC decision in Ashwathanarayanan Setty vs. State of Karnataka, observes “fee” is distinct from “tax” or “penalty”; Contrasts Sec 271H (which provides for penalty not less than Rs 10,000 but which may extend to Rs 100,000 for failure to furnish statements) with Sec 234E (which provides for payment of fee of Rs 200 per day for the period assessee fails to deliver TDS statement) and expresses that Sec 234E prima facie appears to be “in the nature of penalty” for delay in delivering TDS statement : Madras HC
The ruling was delivered by a division bench of Justice R. Sudhakar and Justice G.M. Akbar Ali.
Senior Advocate A.L. Somayaji, Advocates R. Sivaraman, V. Perumal, R.Krishnamoorthy and A. Jenasenan argued on behalf of the assessee's. Revenue was represented by Standing Counsel T. Pramod Kumar Chopda.
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