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2015 (11) TMI 1507 - AT - Income TaxLevy of fee u/s 234E in the order u/s 200A - Held that - The adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee
Issues Involved:
1. Whether the Assessing Officer (A.O.) has the inherent power under Section 200A of the Income Tax Act to levy and charge fees under Section 234E. 2. Whether there is a provision under Section 234E for demanding late filing fees after filing the TDS return. 3. Whether Section 204 read with Section 234E makes a person/officer responsible for payment of late filing fees for late TDS return. 4. Whether late fees demand can be raised by processing TDS return under Section 200A. Detailed Analysis: Issue 1: Inherent Power of A.O. under Section 200A to Levy Fees under Section 234E The primary contention raised by the assessee was that the A.O. does not have the inherent power under Section 200A to levy and charge fees under Section 234E in the absence of specific power conferred on them. The tribunal noted that the issue of whether late filing fees of TDS return under Section 234E can be levied prior to 01/06/2015 has been thoroughly examined by the Coordinate Bench in the case of Siddhi Vinayak Developers vs. DCIT. The tribunal observed that the provisions enabling the levy of late filing fees under Section 234E were brought into effect from 1st June 2015, and prior to this date, there was no enabling provision under Section 200A for raising a demand in respect of levy of fees under Section 234E. Therefore, the tribunal concluded that the A.O. did not have the power to levy fees under Section 234E prior to 01/06/2015. Issue 2: Provision under Section 234E for Demanding Late Filing Fees The tribunal referred to the statutory provisions of Section 234E, which was inserted by the Finance Act 2012 and brought into effect from 1st July 2012. The tribunal noted that Section 234E mandates a fee for defaults in furnishing statements, but it does not explicitly provide for the demand of late filing fees after the filing of the TDS return. The tribunal observed that the levy of such fees was not permissible under the law as it stood prior to 1st June 2015, as there was no enabling provision under Section 200A to levy such fees. Issue 3: Responsibility for Payment of Late Filing Fees under Section 204 read with Section 234E The assessee argued that there is no provision under Section 204 read with Section 234E making a person/officer responsible for the payment of late filing fees for late TDS return. The tribunal did not find any specific mention in the judgment addressing this issue in detail. However, the tribunal's conclusion that the levy of fees under Section 234E prior to 01/06/2015 was not permissible implicitly supports the assessee's contention that there was no legal basis for holding a person/officer responsible for such fees under the cited sections. Issue 4: Late Fees Demand by Processing TDS Return under Section 200A The tribunal examined whether late fees demand can be raised by processing TDS returns under Section 200A. It was noted that the Finance Act 2015, with effect from 1st June 2015, amended Section 200A to include the computation of fees under Section 234E during the processing of TDS statements. The tribunal concluded that prior to this amendment, the scope of Section 200A did not permit the levy of late filing fees under Section 234E. Therefore, any demand for late fees raised by processing TDS returns under Section 200A before 1st June 2015 was beyond the permissible adjustments under the law. Conclusion The tribunal allowed the appeals of the assessee, directing the A.O. to delete the late filing fee of TDS return under Section 234E. The tribunal's decision was based on the legal position that the levy of such fees prior to 1st June 2015 was not supported by the statutory provisions of Section 200A. This judgment was consistent for both Tanish Industries Pvt. Ltd. and Irfan Iqbalbhai Ajmerwala for the Assessment Year 2014-15. The tribunal's order was pronounced on 30th November 2015 at Ahmedabad.
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