2015 (7) TMI 639 - AT - Income Tax

Levy of fee under Section 234E while processing the statement furnished by the assessees under Section 200A - Held that - The Parliament welcomes the citizens to come forward and comply with the provisions of the Act by paying the prescribed fee before filing the statement under Section 200(3) of the Act. However, if the assessee fails to pay the fee before filing the statement under Section 200(3) of the Act, the assessing authority is well within his limit in passing a separate order levying such a fee in addition to processing the statement under Section 200A of the Act. In other words, before 01.06.2015, the assessing authority could pass a separate order under Section 234E levying fee for delay in filing the statement under Section 200(3) of the Act. However, after 01.06.2015, the assessing authority is well within his limit to levy fee under Section 234E of the Act even while processing the statement under Section 200A and making adjustment. In view of the above discussion, this Tribunal is of the considered opinion that the Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a separate order under Section 234E of the Act levying fee provided the limitation for such a levy has not expired. Accordingly, the intimation under Section 200A as confirmed by the CIT(Appeals) in sofar as levy of fee under Section 234E is set aside and fee levied is deleted. However, the other adjustment made by the Assessing Officer in the impugned intimation shall stand as such. - Decided in favour of assessee.

Summary

Issues:
Levy of fee under Section 234E of the Income-tax Act, 1961 while processing the statement furnished by the assessee under Section 200A of the Act.

Analysis:

Issue 1: Levy of Fee under Section 234E of the Act
The primary contention raised was regarding the authority of the Assessing Officer to levy a fee under Section 234E of the Income-tax Act, 1961 while processing the statement under Section 200A of the Act. The petitioner argued that prior to 01.06.2015, there was no provision enabling the Assessing Officer to levy such a fee under Section 200A. The amendment brought by the Finance Act, 2015 empowered the Assessing Officer to make adjustments by levying fees under Section 234E from 01.06.2015 onwards. The Tribunal concurred with the petitioner's argument, stating that before the amendment, the Assessing Officer had no authority to levy fees under Section 234E while processing the statement. Therefore, the fee levied in this manner was deemed beyond the scope of adjustment provided under Section 200A.

Issue 2: Authority to Levy Fee
The debate also revolved around the interpretation of Section 234E, where the petitioner contended that the assessee is liable to pay the fee voluntarily before filing the statement under Section 200(3) of the Act. However, the Assessing Officer was argued to have the authority to levy the fee if the assessee failed to pay voluntarily, especially post the June 2015 amendment. The Tribunal clarified that prior to the amendment, the Assessing Officer could separately pass an order levying fees under Section 234E. The Tribunal rejected the argument that the Assessing Officer could not levy the fee while processing the statement, emphasizing that the Assessing Officer could indeed pass a separate order for such levy.

Issue 3: Comparison with Indian Penal Code
Drawing a parallel with the Indian Penal Code, the Tribunal highlighted that just as the Magistrate or Sessions Judge has the authority to levy fines in addition to imprisonment, the Assessing Officer could also levy fees under the Income-tax Act. The Tribunal rejected the notion that the assessee must pay the fee voluntarily, asserting that the statutory provisions necessitate the payment. The Tribunal concluded that the Assessing Officer could pass a separate order for fee levy before the June 2015 amendment and could levy fees while processing the statement post-amendment.

Conclusion
In its final decision, the Tribunal ruled that the Assessing Officer had exceeded jurisdiction by levying fees under Section 234E while processing the statement under Section 200A. The intimation of fee levied was deemed unsustainable in law. However, the Assessing Officer was permitted to pass a separate order for fee levy if within the statutory limitation. The Tribunal allowed the appeals filed by the assessee, setting aside the fee levied under Section 234E while upholding other adjustments made by the Assessing Officer.

This detailed analysis of the judgment highlights the key arguments, legal interpretations, and the Tribunal's final decision regarding the levy of fees under Section 234E of the Income-tax Act, 1961.