2015 (6) TMI 1192 - AT - Income Tax

Levy of fees under section 234E - intimation issued under section 200A - 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. - Decided in favour of assessee

Summary

Issues:
Challenge to levy of fees under section 234E of the Income Tax Act, 1961 and intimation issued under section 200A for processing of TDS statements for the financial year 2012-13.

Analysis:
The Appellate Tribunal ITAT Amritsar addressed the correctness of the levy of fees under section 234E and the intimation issued under section 200A for TDS statements. The Tribunal referred to a similar case involving Sibia Healthcare Private Limited where the issue was decided in favor of the assessee. The Tribunal examined various High Court decisions on the matter, emphasizing the legal position and the need for adjudication on a short legal issue. Section 234E, inserted by the Finance Act 2012, imposes a fee for defaults in furnishing statements, with specific provisions on the amount and payment. Section 200A, inserted by the Finance Act 2009, outlines the processing of TDS statements, including adjustments and intimation to the deductor. An amendment in 2015 enabled the computation of fees under section 234E during processing under section 200A.

The Tribunal highlighted that pre-June 2015, the law did not allow for raising a demand for fees under section 234E in the intimation under section 200A. The scope of adjustments permitted under section 200A was limited to arithmetical errors, incorrect claims, and interest computation. Any other adjustments, such as the levy of fees under section 234E, were deemed beyond the statutory mandate. The Tribunal emphasized that the intimation under section 200A was appealable under section 246A(a) and should be examined for legality based on the provisions of section 200A.

The Tribunal concluded that the levy of fees under section 234E in the intimation under section 200A was unsustainable in law. The Tribunal upheld the assessee's grievance and deleted the impugned levy of fees under section 234E. The decision was based on the statutory provisions, legal interpretations, and the scope of adjustments permissible under section 200A. The Tribunal reversed the order of the CIT(A) and granted relief to the assessee. The appeal was allowed, and the judgment was pronounced on June 9, 2015.