2016 (1) TMI 462 - AT - Income Tax

Levy of fees under section 234E - proceedings u/s 200A - Held that - Section 200A nowhere authorizes the AO to levy fee under section 234E while processing the return under this section. Thus we allow the appeal of the assessee and delete the demand relating to Quarter-1. See case of Lions Club of North Surat Charitable Trust (2015 (9) TMI 1231 - ITAT AHMEDABAD ) - Decided in favour of assessee

Summary

Issues:
Appeal against levy of fees under section 234E of the Income Tax Act, 1961 for the Asstt.Year 2014-15.

Analysis:
1. The assessee appealed against the order of the CIT(A) upholding the levy of fees under section 234E amounting to Rs. 1,16,180/- for four quarters of F.Y. 2013-14. The grounds of appeal were found to be descriptive and argumentative, not in consonance with Rule 8 of the Income Tax (Appellate Tribunal) Rule.

2. The assessee failed to submit TDS statement under section 200(3) of the Act within the prescribed due date, leading to the levy of fees. The CIT(A) intimated the fees by email and notice. The assessee filed four appeals before the CIT(A), which were disposed of by a common order. The assessee contended that the issue was covered by a Tribunal order in a similar case, while the DR relied on the CIT(A)'s order.

3. The Tribunal found that each demand intimated to the assessee by the DCIT-TDS was an independent executable order, requiring separate appeals for each demand. The appeal was considered valid only for the levy of late fees for quarter no.1, as per the Tribunal's order in a similar case. The Tribunal cited relevant legal provisions and previous judgments to support its decision.

4. The Tribunal highlighted the provisions of section 234E and section 200A of the Income Tax Act, emphasizing that post an amendment in June 2015, adjustments could be made for fees under section 234E. However, prior to the amendment, such adjustments were beyond the scope of permissible adjustments under section 200A. The Tribunal concluded that the levy of fees under section 234E in the intimation under section 200A was unsustainable in law, upholding the assessee's grievance and deleting the impugned levy.

5. The Tribunal's decision was based on the limited mandate of section 200A at the relevant time, which did not permit adjustments for fees under section 234E. The Tribunal found that the AO had no authority to levy such fees while processing the return under section 200A. Consequently, the appeal of the assessee was allowed, and the demand up to Rs. 47,820/- for Quarter-1 was deleted.

6. In conclusion, the Tribunal partly allowed the appeal of the assessee, upholding the grievance against the levy of fees under section 234E and providing relief accordingly. The order was pronounced in the Court on 17th November, 2015 at Ahmedabad.