2016 (10) TMI 1222 - AT - Income Tax

Levy of fees u/s 234E - demand raised u/s 234E on statements processed u/s 200A before 01.06.2015 - Held that - We have considered the recent decision of Hon ble Karnataka High Court in the case of Shri Fatheraj Singhvi & Ors (2016 (9) TMI 964 - KARNATAKA HIGH COURT) wherein the issue of levy of fees u/s 234E on statements processed u/s 200A before 01.06.2015 has been categorically discussed by the Hon ble High Court and in para 24 of the said order it was held that no demand for fee u/s 234E can be made in intimation issued for TDS deducted u/s 200A before 01.06.2015 . We have also gone through the judgment of Hon ble Supreme Court in the case of CIT vs. Vatika Township Pvt. Ltd. (2014 (9) TMI 576 - SUPREME COURT) wherein the Hon ble Apex Court has discussed in detail the general principle of concerning retrospectively and held that unless contrary intention appears, a legislation is presumed not to have a retrospective operation - we set aside the order of ld. CIT (A) and direct the AO to drop the demand raised of ₹ 4,200/- u/s 234E on statements processed u/s 200A before 01.06.2015. Thus grounds raised by the assessee are allowed.

Summary

Issues:
- Appeal against levy of fees under section 234E for delay in filing TDS return.
- Jurisdiction of AO to levy fees under section 234E in TDS statements processed under section 200A before 01.06.2015.

Analysis:

Issue 1: Appeal against levy of fees under section 234E for delay in filing TDS return:
The appeals were directed against the orders of the ld. CIT (Appeals) pertaining to the assessment year 2013-14. The appellant contested the imposition of fees under section 234E for delays in filing TDS returns. The appellant argued that the power to charge fees under section 234E while issuing intimation under section 200A was vested with the revenue only after the substitution of the relevant clause by the Finance Act, 2015, effective from 01.06.2015. The appellant relied on various judicial pronouncements to support this argument, emphasizing the prospective application of the legislative amendments. The appellant contended that the High Court had not addressed the issue of the AO's authority to levy fees under section 234E in TDS statements processed under section 200A before 01.06.2015.

Issue 2: Jurisdiction of AO to levy fees under section 234E in TDS statements processed under section 200A before 01.06.2015:
The Tribunal considered the arguments presented by both parties and analyzed the relevant legal precedents. It noted that the jurisdictional High Court had validated section 234E but had not specifically addressed the power of the AO to levy fees under section 234E in TDS statements processed under section 200A before 01.06.2015. The Tribunal referred to a recent decision of the Karnataka High Court which categorically stated that no demand for fees under section 234E could be made in intimation issued for TDS deducted under section 200A before 01.06.2015. Additionally, the Tribunal cited a Supreme Court judgment emphasizing that legislation is presumed not to have retrospective operation unless a contrary intention appears. Relying on these judgments, the Tribunal set aside the orders of the ld. CIT (Appeals) and directed the AO to drop the demands raised under section 234E for the relevant TDS statements processed before 01.06.2015.

In conclusion, the Tribunal allowed the appeals of the assessee, emphasizing the prospective application of the legislative amendments and the lack of authority for the AO to levy fees under section 234E in TDS statements processed under section 200A before 01.06.2015.