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Section 234E of Income Tax Act, 1961

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This month we received lot of demands from CPC seeking demand for non remittance of 234E FEES (not Tax).234E will not apply to cases where TDS payment is made beyond the time limit prescribed for payment of TDS u/s 200(3)   There are two reasons
Reason 1
Duty of person deducting tax.
200. [(1)] Any person deducting any sum in accordance with [the foregoing provisions of this Chapter] shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs.
[(2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs.]
[(3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time,[prepare such statements for such period as may be prescribed] and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.]

Section 200(3) says we have to file our Quarterly return AFTER paying the TDS within the prescribed time.
If we pay the TDS amount to the credit of the CG after the due date for payment there is no requirement for us to file our TDS return at all as per section 200(3).
When Charging mechanism fails where is the question of collection FEES Case law of Supreme Court P.C.Srinivasa Chetty (Sine charging mechanism for operation of 234E fees is 200(3). They can charge fees only when we made the tds payment within the prescribed time but have not filed my Quarterly return within the prescribed time
Reason 2
Okay We will harmoniously interpret the section in spirit along with section 201. After payment within the prescribed time or after the prescribed time we have to file the Quarterly return!! i hope we all agree.
Section 200(3) say we should pay and file Quarterly return else our TDS return is invalid. I missed the prescribed date for payment and also the prescribed date for the Quarterly return Now We paid our TDs to government along with interest u/s 201 and filed our return immediately.
Part 1
Then you cannot charge us fees under 234E, since without payment of tax we cannot upload the return. If Department is not accepting the return how can they ask fees for not filing within the due date
Part 2
Let me recall a splendid decision given a decade ago
Where books of accounts are not maintained you cannot penalize Assessee for not getting his books of accounts audited Ram Prakash C Puri – 77 ITD 210
Department said you have not paid our tax pay interest (interest is compensatory in nature) We pay from due date to date of payment. Now when we pay interest for late payment how can wer / why should we again compensate the Government in the form of 234E fees.
Section 234E starts saying

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