2016 (2) TMI 674 - AT - Income Tax

Levy 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.

Summary

Issues:
Appeal against levy of fee under section 234E of the Act.

Analysis:
The appellant contested the levy of a fee under section 234E of the Act. The Tribunal referred to a previous decision in the appellant's favor in a similar case. The Tribunal cited the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT, highlighting that the issue was covered in favor of the assessee. The Tribunal emphasized that the levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. The Tribunal noted that prior to June 1, 2015, no provision allowed for raising a demand for fees under section 234E during the processing of a TDS statement. As the impugned order was passed before the amendment on June 1, 2015, the Tribunal concluded that the levy of late filing fees under section 234E was unsustainable in law. Consequently, the Tribunal upheld the appellant's grievance and deleted the fee.

The Departmental Representative did not contest the judicial precedent cited by the appellant. It was acknowledged that the provisions allowing the levy of late filing fees under section 234E came into effect from June 1, 2015, while the impugned order was issued earlier. In light of this, and considering the entirety of the case, the Tribunal decided to delete the levy of late filing fees under section 234E. The Tribunal relied on the previous decision and allowed the appeal of the assessee, providing relief accordingly.

In conclusion, the Tribunal, following the precedent and legal provisions, allowed the appeal of the assessee and deleted the levy of the fee imposed under section 234E of the Act. The decision was based on the inapplicability of the fee levy provision before the relevant amendment date, ensuring the appellant received the necessary relief.

Order pronounced in the Court on 1. 2. 2016.