2017 (12) TMI 1554 - AT - Income Tax

Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that - the decision in the case of Wonder Waves Entertainment Pvt. Ltd. Versus DCIT, CPC, TDS 2015 (10) TMI 2477 - ITAT AHMEDABAD referred, where it was held that in the absence of the enabling provision under section 200A, no such levy could be effected - the default in furnishing TDS statement prior to 01/06/2015 do not give rise to late filing fee under s.234-E in view of the limited mandate of section 200A at the relevant time. The late filing fees imposed u/s 234-E of the Act deleted - appeal allowed - decided in favor of assessee.

Summary

Issues:
Late filing fee charged under section 234-E for belated filing of TDS return.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax(Appeals) regarding the late filing fee imposed under section 234E for belated filing of TDS return. The appellant argued that the default in furnishing TDS statement before 01/06/2015 did not give rise to late filing fee under section 234E due to the limited mandate of section 200A at that time. The appellant relied on various tribunal decisions, including one in the case of Wonder Waves Entertainment Pvt.Ltd., to support their claim. The Tribunal examined the issue and referred to the provisions of section 234E and section 200A of the Income Tax Act. It highlighted that prior to 1st June 2015, there was no provision for raising a demand for late fees under section 234E in the intimation under section 200A. The Tribunal concluded that the adjustment for levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. Therefore, the late fee charged under section 234E was unsustainable in law, and the Tribunal upheld the appellant's grievance, deleting the late filing fee imposed.

The Tribunal emphasized that the intimation under section 200A, raising a demand or directing a refund to the tax deductor, could only be passed within one year from the end of the financial year in which the related TDS statement was filed. As the related TDS statement was filed on 19th February 2014, any levy of fees under section 234E should have been made by 31st March 2015. Since that time had elapsed, the defect was not curable even at that stage. The Tribunal, in line with the decision of another Bench, directed the Assessing Officer to delete the late filing fees imposed under section 234E of the Act. Consequently, the appeal of the assessee was allowed, and the late filing fee was set aside.

In conclusion, the Tribunal's detailed analysis of the provisions of section 234E and section 200A, along with the examination of relevant legal precedents, led to the deletion of the late filing fee charged under section 234E for the belated filing of the TDS return. The decision was based on the limited mandate of section 200A before 1st June 2015, which did not permit the levy of fees under section 234E in the intimation process.