2015 (6) TMI 1191 - AT - Income Tax

Levy of fees u/s 234 E - intimations u/s 200A in respect of processing of TDS statements for the second and third quarter of the financial year 2013-14 - HELD THAT - Appeal is 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 wherein it has been held that prior to 01.06.2015, there was no enabling provision u/s 200A of the Act for raising a demand in respect of levy of fee u/s 234E - Decided in favor of assessee.

Summary

Issues Involved:
Challenge to correctness of orders upholding levy of fees under section 234E of the Income Tax Act, 1961 and intimations issued under section 200A for TDS statements.

Detailed Analysis:

Issue 1: Correctness of Levy of Fees under Section 234E
The appeals questioned the correctness of orders upholding the levy of fees under section 234E of the Income Tax Act, 1961. The Tribunal referred to a similar case where the issue was decided in favor of the assessee. The Tribunal highlighted that section 234E imposes a fee for defaults in furnishing statements, specifying the amount and payment conditions. The Tribunal noted that the law as it stood at that time did not allow for the levy of fees under section 234E in the intimation under section 200A. The Tribunal emphasized that the adjustment for the levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. It was concluded that the impugned levy of fees under section 234E was unsustainable in law, and the grievance of the assessee was upheld, leading to the deletion of the impugned levy.

Issue 2: Intimations under Section 200A
The Tribunal discussed the provisions of section 200A, which govern the processing of TDS statements. The Tribunal highlighted the amendment made by the Finance Act 2015, which enabled the computation of fees under section 234E in the processing of TDS statements post 1st June 2015. However, the Tribunal noted that prior to this amendment, no provision existed for raising a demand in respect of fees under section 234E in the intimation under section 200A. The Tribunal emphasized that the adjustment for fees under section 234E was not permissible under the law as it existed before the amendment. Therefore, the Tribunal reversed the orders of the learned CIT(A) and granted relief to the assessee.

In conclusion, the Tribunal allowed the appeals, emphasizing that the levy of fees under section 234E in the intimation under section 200A was not legally sustainable before the relevant amendment. The Tribunal upheld the grievance of the assessee and deleted the impugned levy of fees under section 234E, providing relief accordingly.