2019 (2) TMI 1620 - AT - Income Tax

Late fee under section 234E - intimation u/s 200A - intimation given in purported exercise of power under Section 200A in respect of fees under Section 234E for the period prior to 1.6.2015 - HELD THAT - In the present case, undisputedly, assessee filed its TDS return (Form 26Q) for first quarter of financial year 2014-15 on 15.01.2015 and same was processed and intimation u/s 200A was issued vide order dated 20.01.2015. Section 200A has been amended w.e.f. 1.6.2015 empowering Assessing officer to levying fees under section 234E of the Act. It is therefore not a case of continuing default where assessee has defaulted in furnishing TDS statement, even after 1.6.2015 and thereafter, demand for payment of fees under section 234E has been raised by the Assessing Officer. In case of Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT has held that provisions of amended section 200A are prospective in nature. Further, in case of Dundlod Shikshan Sansthan 2015 (9) TMI 807 - RAJASTHAN HIGH COURT relied by CIT (A) is in the context of validity of section 234E, but not in context of power of AO for levy of fee under section 234E prior to 1.6.2015. It is observed that many decisions of this Tribunal has taken similar view by following decision of Fatheraj Singhvi (supra). Assessing Officer while processing TDS statements for the period prior to 01.06.2015, was not empowered to charge fees u/s 234E of the Act. Hence, demand raised by way of charging fees under section 234E by way of intimation under section 200 A of the Act is not valid and same is deleted. - Decided in favour of assessee.

Summary

Issues:
1. Levy of penalty under section 234E by the Assessing Officer.
2. Interpretation of Section 200A of the Income Tax Act, 1961 regarding the power to charge fees under section 234E.
3. Validity of the order passed by the CIT (A) confirming the penalty.

Analysis:
1. The appeal was filed by the assessee against the order passed by the CIT (A) confirming the penalty of ?30,000 levied by the Assessing Officer under section 234E. The assessee argued that there was no opportunity given to be heard before the penalty was confirmed. The grounds of appeal also challenged the legality and factual basis of the order.

2. The case revolved around the interpretation of Section 200A of the Income Tax Act, 1961. The assessee received an intimation under section 200A, dated 20/01/2015, for a late fee under section 234E of ?30,000. The assessee contended that the TDS was deducted and deposited on time, but there was a delay in filing the statement for the 1st quarter of the financial year 2014-15. The CIT (A) rejected the claim based on a decision of the Hon'ble Rajasthan High Court.

3. The Appellate Tribunal analyzed the amendments made to Section 200A by the Finance Act, 2015, which empowered the Assessing Officer to levy fees under section 234E from 1st June 2015. The Tribunal observed that prior to this amendment, the Assessing Officer was not authorized to charge fees under section 234E for TDS statements processed before 1st June 2015. The Tribunal referred to the decision of the Hon'ble Karnataka High Court in a similar case and held that the provisions of the amended section 200A were prospective. Consequently, the demand raised by charging fees under section 234E in the intimation under section 200A was deemed invalid, and the penalty was deleted.

In conclusion, the appeal filed by the assessee was allowed, and the penalty levied under section 234E was deemed invalid and deleted. The Tribunal's decision was based on the interpretation of the relevant provisions of the Income Tax Act and the retrospective application of the amendments to Section 200A regarding the power to charge fees under section 234E.