2015 (2) TMI 1148 - AT - Income Tax

Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - 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. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed and that time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.

Summary

Issues:
Levy of fee under section 234E of the Income Tax Act for failure to submit TDS return for quarter no. 4.

Analysis:
The appellant contested the levy of fee amounting to Rs. 16,504 under section 234E of the Income Tax Act for failure to submit the TDS return for quarter no. 4. The appellant argued that the issue had been extensively considered by the ITAT, Amristar Bench in a similar case. The Co-ordinate Bench held that the adjustment in respect of the levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. The intimation under section 200A, which was the subject of appeal, did not have an enabling provision for raising a demand in respect of the levy of fees under section 234E before June 1, 2015. The ITAT upheld the appellant's grievance and deleted the impugned levy of fee under section 234E, citing that the levy was unsustainable in law.

The ITAT further emphasized that the DCIT, TDS, CPC did not have the authority under section 200A of the Act to make adjustments by imposing a fee under section 234E. Therefore, the ITAT allowed the appeal of the assessee and deleted the penalty. The judgment highlighted the legal provisions of sections 234E and 200A of the Income Tax Act, the amendments made by the Finance Acts of 2012 and 2015, and the limitations on adjustments permissible under section 200A. The ITAT's decision was based on a thorough examination of the legal provisions and their application to the specific case at hand, ultimately providing relief to the appellant against the levy of fees under section 234E.