2015 (12) TMI 1027 - AT - Income Tax

Levy 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. This intimation is an appealable order under section 246A(a), and, therefore, the CIT(A) ought to have examined legality of the adjustment made under this intimation in the light of the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected. 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 as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. 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 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. See Lions Club of North Surat Charitable Trust Versus Income Tax Officer TDS-2, Surat (New). 2015 (9) TMI 1231 - ITAT AHMEDABAD - Decided in favour of assessee

Summary

Issues:
- Levy of late filing fees under section 234E for the financial year 2013-14.
- Interpretation of Section 200A and its implications on the levy of fees under section 234E.
- Comparison of decisions by different Tribunals on similar issues.

Levy of Late Filing Fees (Section 234E):
The appellant contested the levy of a late filing fee of Rs. 13,000 under section 234E for the 1st quarter of the financial year 2013-14. The appellant argued that the fee was wrongly imposed as the TDS statement was filed beyond the due date, and the fee should have been paid before filing the statement as per section 234E(3) of the Act. The appellant objected to the levy of the fee in the intimation under section 200A. The Tribunal noted that a similar issue had been decided in favor of the assessee by the Amritsar Tribunal and the Ahmedabad Tribunal in related cases. The Tribunal concluded that the levy of fees under section 234E was unsustainable in law and deleted the fee, upholding the grievance of the assessee.

Interpretation of Section 200A:
The Tribunal analyzed the provisions of Section 200A, which govern the processing of TDS statements. It highlighted the amendment made through the Finance Act 2015, effective from June 1, 2015, which introduced the computation of fees under section 234E in the processing of TDS statements. However, the Tribunal emphasized that prior to this amendment, there was no provision for raising a demand for fees under section 234E during the processing of TDS statements. The Tribunal concluded that the adjustment for the levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A before the amendment. Therefore, the Tribunal held that the levy of fees under section 234E in the intimation under section 200A was not legally sustainable.

Comparison of Tribunal Decisions:
The Tribunal referred to decisions by the Amritsar and Ahmedabad Tribunals on similar issues and found that the coordinate Bench had decided in favor of the assessee in related cases. The Tribunal noted that the Amritsar Tribunal had observed that the levy of fees under section 234E was unsustainable in law. Based on these precedents, the Tribunal reversed the orders of the lower authorities and allowed the claim of the assessee in all the appeals. Ultimately, the Tribunal allowed all the appeals filed by the assessee, providing relief in the matter of late filing fees under section 234E.

In conclusion, the Tribunal's judgment favored the assessee by deleting the levy of late filing fees under section 234E for the financial year 2013-14, based on the interpretation of Section 200A and in line with the decisions of other Tribunals on similar issues.