2015 (9) TMI 1400 - AT - Income Tax

Levy of fees under section 234E - intimation issued under section 200A - Held that - We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT 2015 (6) TMI 437 - ITAT AMRITSAR adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. - Decided in favour of assessee

Summary

Issues:
Challenge to correctness of levy of fees under section 234E of the Income Tax Act, 1961 by the ld. CIT(A) in an order dated 12th November, 2014 for the Assessment Year 2013-14.

Analysis:
The appellant contested the levy of fees under section 234E of the Income Tax Act amounting to Rs. 7,600, arguing that the decision by the Commissioner of Income Tax (Appeals) was erroneous. The ITAT Ahmedabad bench reviewed the case in light of legal provisions and judicial precedents. Referring to a decision by ITAT Amritsar Bench, the ITAT Ahmedabad bench noted that the issue was in favor of the assessee. The legal position under section 234E was discussed, emphasizing the provisions related to defaults in furnishing statements and the maximum fee payable. Additionally, the provisions of Section 200A regarding the processing of TDS statements were examined. The bench highlighted the amendment brought by the Finance Act 2015, which allowed for the computation of fees under section 234E during the processing of TDS statements post-June 2015.

The ITAT Ahmedabad bench emphasized that prior to June 2015, there was no provision enabling the levy of fees under section 234E during the processing of TDS statements under Section 200A. The bench clarified that the adjustments permissible under Section 200A were limited to arithmetical errors, incorrect claims, and interest computations based on the TDS statement. Any other adjustments, including the levy of fees under section 234E, were deemed beyond the scope of Section 200A. The bench highlighted that the intimation under Section 200A was appealable, and the Commissioner of Income Tax (Appeals) should have assessed the legality of the adjustment based on the scope of Section 200A, which was not done in this case.

Considering the legal provisions and the judicial precedent, the ITAT Ahmedabad bench concluded that the levy of fees under section 234E in the impugned intimation issued on 11th December 2013 was unsustainable in law. The bench ruled in favor of the assessee, deleting the levy of late filing fees under section 234E. The appeal was allowed, providing relief to the appellant. The order was pronounced on 15th September 2015.