2018 (7) TMI 1870 - AT - Income Tax

Levy of fee under Section 234E - processing the TDS statement furnished by the assessee u/s 200A - Fee for default in furnishing statements - Held that - Prior to 01.06.2015, there was no enabling provision in Section 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fee under Section 234E of the Act with effect from 01.06.2015. See SMT. G. INDHIRANI, SALEM, RAJAGURU SPINNING MILLS LTD., A. DHAKSHINAMURTHY , PADMA TEXTILES & MURTHY LUNGI COMPANY VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX, CPC TDS, TDS CPC, UTTAR PRADESH 2015 (7) TMI 640 - ITAT CHENNAI As held by this ITAT, the intimation sent to the assessee u/s. 200A dated 16.01.2014 raising the demand of ₹ 9,000/- u/s. 234E towards levy of late filing fee is invalid as there was no enabling provision in section 200A, viz., clause (1)(C) of section 234E, prior to 01.06.2015 for levy of fees u/s. 234E while processing the statement of tax deducted at source. It was open for the AO to pass separate order u/s. 234E levying the fee, provided the limitation for such a levy did not expire. However, in this case, the AO has not passed any order u/s. 234E independently within 31.03.2015 and hence, the impugned order is set aside. - Decided in favour of assessee.

Summary

Issues:
1. Delay in filing E-TDS statement leading to a demand of fee u/s. 234E.
2. Interpretation of section 200A and 234E regarding the levy of fees for late filing.

Issue 1 - Delay in filing E-TDS statement and demand of fee u/s. 234E:
The appellant, a deductor of tax, filed an appeal against the order of the Commissioner of Income Tax (Appeals) regarding a demand of ?9,000 under section 234E for late filing of the E-TDS statement. The appellant paid the tax deducted at source within the due date but filed the E-TDS statement with a delay of 45 days. The Assessing Officer (AO) raised the demand of ?9,000 under section 234E. The appellant contended that the order passed by the AO was barred by limitation as there was no enabling provision in section 200A for levy of fees u/s. 234E before 01.06.2015. The AO did not pass a separate order u/s. 234E independently within the specified time, leading to the invalidity of the intimation sent to the appellant u/s. 200A.

Issue 2 - Interpretation of section 200A and 234E regarding the levy of fees for late filing:
The appellant argued that section 200A(1)(C), inserted by the Finance Act, 2015, restricted the time within which intimation can be sent u/s. 200A. The appellant cited a judgment of ITAT, A Bench, Chennai, which held that prior to 01.06.2015, there was no provision in section 200A for the levy of fees u/s. 234E while processing the E-TDS statement. The ITAT held that the AO could pass a separate order u/s. 234E for levying the fee, provided the limitation did not expire. In this case, since the AO did not pass a separate order u/s. 234E within the specified time, the intimation sent to the appellant u/s. 200A was deemed invalid. The ITAT concurred with the appellant's submissions and set aside the impugned order, allowing the appeal.

This judgment clarifies the interpretation of sections 200A and 234E concerning the levy of fees for late filing of E-TDS statements and emphasizes the importance of complying with statutory timelines and provisions to avoid invalidity of orders.