2016 (1) TMI 866 - AT - Income Tax

Charging of late fee under section 234E while processing the return under section 200A - Held that - While processing the return under section 200A of the Act, the ld.AO cannot impose levy of fees under section 234E of the Act. Respectfully following the order in the case of Sibia Healthcare Pvt. Ltd. VS. DCIT 2015 (6) TMI 437 - ITAT AMRITSAR as well as Indian Overseas Bank Vs. DCIT 2015 (9) TMI 1290 - ITAT AHMEDABAD we allow both the appeals and delete imposition of fees under section 234E of the Income Tax Act. - Decided in favour of assessee.

Summary

Issues:
1. Levy of late fees under section 234E for TDS return filed beyond due date.
2. Appeal against the CIT(A)'s order confirming the late fee imposition.
3. Interpretation of Section 234E and Section 200A of the Income Tax Act.
4. Comparison of judicial precedents from different High Courts and ITAT benches.
5. Decision on whether the late fee under section 234E was validly imposed.

Issue 1: Levy of Late Fees under Section 234E
The appellant contested the imposition of fees amounting to Rs. 4,000 each for Quarter No.3 related to Form No.26Q for the F.Y. 2012-13, as the TDS statements were filed late. The AO imposed penalties for the delayed filings, leading to the appeal before the CIT(A).

Issue 2: Appeal against CIT(A)'s Order
The appellant challenged the CIT(A)'s decision confirming the late fee imposition for two quarters while allowing the appeal for others. The appellant argued that the issue was covered by a Tribunal order and provided copies of relevant orders. The DR failed to counter the appellant's contentions.

Issue 3: Interpretation of Section 234E and Section 200A
The Tribunal referred to Section 234E, which pertains to fees for defaults in furnishing statements, and Section 200A, which deals with processing TDS statements. The Tribunal highlighted the limitations of adjustments permissible under Section 200A and the amendments made to it post-June 2015.

Issue 4: Comparison of Judicial Precedents
The Tribunal compared decisions from various High Courts and ITAT benches to analyze the issue at hand. Notably, the Tribunal cited a case from the ITAT Amritsar Bench, emphasizing that the AO cannot impose fees under Section 234E while processing returns under Section 200A.

Issue 5: Decision on Late Fee Imposition
Considering the precedents and legal provisions, the Tribunal concluded that the late fee imposition under Section 234E was beyond the permissible scope of adjustments under Section 200A. The Tribunal upheld the appellant's grievance and deleted the late fee levied, granting relief to the assessee.

In conclusion, the Tribunal allowed both appeals, following the judicial precedents and statutory provisions, thereby deleting the imposition of late fees under Section 234E of the Income Tax Act.