2016 (2) TMI 265 - AT - Income Tax

Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that - As decided in case of Wonder Waves Entertainment Pvt Ltd 2015 (10) TMI 2477 - ITAT AHMEDABAD 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.

Summary

Issues:
1. Dismissal of appeal against order passed u/s 200A of the Act by CIT(A).
2. Confirmation of fees charged u/s 234E for late filing of TDS return.
3. Jurisdiction of fees levied u/s 234E in the intimation processed u/s 200A.
4. Calculation of late filing fee u/s 234E from TDS payment to filing date.
5. Applicability of ITAT decision in similar cases.
6. Interpretation of sections 234E and 200A pre and post amendments.
7. Legal scope of adjustments permissible under section 200A.
8. Appealability of intimation under section 200A.
9. Time limit for passing intimation under section 200A.

Analysis:
1. The appeals were filed against the orders of the CIT(A) for Assessment Year 2015-16. Since the appeals belonged to the same assessee with a common issue, they were heard together. The lead case was taken as ITA No. 3180/Ahd/2015.
2. The assessee raised grounds against the dismissal of appeal u/s 200A and confirmation of fees u/s 234E for late TDS return filing. The CIT(A) erred in not appreciating the bonafide explanation for late filing and the lack of revenue loss.
3. The ITAT referred to similar cases and decisions, including the Amritsar Bench's ruling favoring the assessee. The ITAT upheld the decision to delete the late fee u/s 234E, citing the limited mandate of Section 200A.
4. The ITAT highlighted the amendments in Section 200A post Finance Act 2015, allowing computation of fees u/s 234E in TDS statement processing. However, pre-amendment, such adjustments were beyond the scope of permissible adjustments under Section 200A.
5. The ITAT concluded that the levy of fees under section 234E in the intimation under section 200A was unsustainable in law. The appeals were allowed, and the late fees charged were deleted.
6. The ITAT emphasized the appealability of the intimation under section 200A and the time limit for passing such intimation. The decision was based on legal interpretations and precedents, granting relief to the assessee.

Overall, the ITAT ruled in favor of the assessee, deleting the late fee charged under section 234E based on legal provisions and precedents, ensuring a fair and just outcome for the appellant.