2016 (2) TMI 299 - AT - Income Tax

Levy of fee under section 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 Involved:
Levy of fee under section 234E of the Income Tax Act for late submission of Form No.24Q for quarter no. 4 for F.Y.2012-13.

Detailed Analysis:

1. Issue of Levy of Fee under Section 234E:
The primary issue in this case revolved around the levy of a fee amounting to Rs. 63,600 under section 234E of the Income Tax Act for the late submission of Form No.24Q for a specific quarter. The assessee contested this levy before the ld. CIT(A), arguing that the fee imposition was not justified. However, the ld. CIT(A) upheld the levy, stating that it was mandatory under the Act, similar to other mandatory sections. The ld. CIT(A) also noted that the amendment to Section 200A by the Finance Act, 2015 aimed at simplifying procedures and bringing clarity.

2. Legal Interpretation and Precedents:
The ITAT, Amristar Bench had previously addressed a similar issue in the case of Sibia Healthcare Pvt. Ltd. Vs. DCIT. The Tribunal observed that the DCIT did not have the power under section 200A to levy such a fee while processing the returns. The Tribunal highlighted that Section 200A did not provide for adjustments regarding the levy of fees, indicating that such fees cannot be imposed during processing.

3. Analysis of Relevant Legal Provisions:
The provisions of Section 234E, inserted by the Finance Act 2012, outline the fee for defaults in furnishing statements, specifying the amount and conditions for the fee. Additionally, Section 200A, inserted by the Finance Act 2009, details the processing of tax deduction statements and the adjustments to be made. Notably, an amendment to Section 200A in the Finance Act 2015 introduced provisions for computing fees under section 234E during processing, which was not present before June 2015.

4. Decision and Ruling:
The Tribunal, considering the arguments and precedents, concluded that the adjustment for the levy of fees under section 234E was beyond the permissible scope of adjustments under Section 200A. As the law did not enable such a levy before June 2015, the Tribunal found the imposition of the fee unsustainable. Consequently, the Tribunal upheld the appeal of the assessee, deleting the fee charged under section 234E of the Income Tax Act amounting to Rs. 63,600.

In summary, the judgment highlighted the legal intricacies surrounding the levy of fees under section 234E, emphasizing the need for alignment with statutory provisions and precedents to ensure the appropriate application of tax laws.