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2016 (1) TMI 501 - AT - Income TaxLevy 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 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 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
Issues:
Challenge to levy of late filing fees under section 234E of the Income Tax Act, 1961 in the consolidated order dated 26th August, 2015, passed by the ld. CIT(A), Ahmedabad for Assessment Years 2013-14 and 2014-15. Analysis: The appellant challenged the correctness of the levy of fees under section 234E in eleven appeals, contending that the ld. CIT(A) erred in upholding the late filing fees during the processing of TDS returns under section 200A of the Act. The ITAT considered the issue in light of a precedent set by ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT. The ITAT noted that the law prior to June 2015 did not allow for the levy of fees under section 234E during the processing of TDS statements under section 200A. The ITAT emphasized that the adjustment for levy of fees under section 234E was beyond the permissible adjustments under section 200A. The ITAT concluded that the impugned levy of fees under section 234E was unsustainable in law and upheld the assessee's grievance, deleting the late filing fees. The ITAT also highlighted the amendment in Section 200A brought about by the Finance Act 2015, effective from June 1, 2015, which introduced provisions for computing fees under section 234E during the processing of TDS statements. However, since the relevant TDS statement was filed before this amendment, the ITAT held that the levy of fees under section 234E was not permissible based on the law in force at that time. The ITAT emphasized that the intimation under section 200A could only be passed within one year from the end of the financial year in which the related TDS statement was filed, and since the time limit had passed, the defect was not curable. Thus, the ITAT allowed all eleven appeals and deleted the levy of late filing fees under section 234E in favor of the appellant. In conclusion, the ITAT ruled in favor of the appellant, holding that the levy of late filing fees under section 234E during the processing of TDS returns under section 200A was not permissible under the law as it stood before the relevant amendment in June 2015. The ITAT emphasized the limited scope of adjustments permitted under section 200A and concluded that the levy of fees under section 234E was unsustainable in law. As a result, the ITAT allowed all eleven appeals challenging the levy of late filing fees and granted relief to the appellant by deleting the impugned fees.
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