2016 (1) TMI 1026 - 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. 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. - Decided in favour of assessee

Summary

Issues:
- Levy of fees under section 234E by the Assessing Officer.
- Interpretation of provisions of section 234E and 200A.
- Applicability of late filing fees prior to 1st June 2015.
- Judicial precedent and decisions of ITAT on similar issues.

Levy of fees under section 234E by the Assessing Officer:
The appellant challenged the order of the Commissioner of Income Tax (Appeals) confirming the levy of fees under section 234E. The grounds of appeal included arguments against the Assessing Officer's power to levy fees under section 234E and the absence of provisions for demanding late filing fees post TDS return filing. The appellant sought liberty to amend and add grounds of appeal. The ITAT considered the appellant's contentions and relied on a similar issue decided in favor of the assessee by the Tribunal in a previous case.

Interpretation of provisions of section 234E and 200A:
The ITAT examined the provisions of section 234E, which imposes a fee for defaults in furnishing statements, and section 200A, which deals with processing of tax deducted at source statements. The ITAT highlighted the amendments made to section 200A by the Finance Act 2015, effective from 1st June 2015, enabling the computation of fees under section 234E during processing of TDS statements. The ITAT emphasized the scope of adjustments permissible under section 200A and concluded that the levy of fees under section 234E was beyond the permissible adjustments under the law before the amendment.

Applicability of late filing fees prior to 1st June 2015:
The ITAT noted that the impugned order was passed before 1st June 2015 when the amendment to section 200A came into effect. It emphasized that the adjustment for levy of fees under section 234E was not permissible before the amendment, and the intimation under section 200A could not include such a demand. The ITAT held that the levy of fees under section 234E was unsustainable in law and deleted the impugned levy, granting relief to the assessee.

Judicial precedent and decisions of ITAT on similar issues:
The ITAT relied on various judicial precedents and decisions of ITAT benches to support its conclusion. It referenced decisions from different High Courts and ITAT benches that favored the assessee's position on the levy of late filing fees under section 234E. The ITAT allowed the appeals of the assessee based on the consistent legal position established in previous cases and directed the Assessing Officer to delete the late filing fees under section 234E.

In conclusion, the ITAT allowed the appeals of the assessee, deleted the demand raised under section 234E of the Income Tax Act, and upheld the relief granted to the assessee based on legal interpretations and judicial precedents supporting the assessee's position.