2015 (9) TMI 1428 - 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 involved:
Challenge to the levy of late filing fees under section 234E in an appeal for assessment year 2013-14.

Analysis:
The judgment revolves around the challenge to the Assessing Officer's action in imposing late filing fees of Rs. 27,446 under section 234E dated 15-2-2014. The appellant cited a tribunal's order in Sibia Healthcare Pvt. Ltd. v/s. DCIT, emphasizing that section 234E levy was not sustainable before 1-6-2015. The tribunal analyzed sections 234E and 200A of the Income Tax Act, highlighting the limitations on adjustments permissible under section 200A. It noted that, as of the relevant time, only adjustments for arithmetical errors, incorrect claims, and interest were allowed under section 200A, with no provision for fees under section 234E. The judgment emphasized that the intimation under section 200A could only raise demands or refunds within one year from the end of the financial year in which the TDS statement was filed, which had already lapsed in this case. Consequently, the tribunal ruled the levy of fees under section 234E as unsustainable in law, upholding the appellant's grievance and deleting the impugned fee.

The tribunal provided the Revenue an opportunity to distinguish the facts or law from the aforementioned decision but found no such distinction. Consequently, the tribunal accepted the appellant's arguments based on the previous decision, leading to the success of the sole substantive ground in the appeal. Ultimately, the tribunal allowed the appellant's appeal, pronouncing the order in court on 29th September 2015 in Ahmedabad.