2017 (11) TMI 1847 - AT - Income Tax

Late filing fee u/s 234E - processing the statement under Section 200A - HELD THAT - The late fee envisaged in Section 234E of the Act has been charged by the AO in this case while processing the TDS statement under Section 200A on 14.06.2013, which is indeed prior to 01.06.2015. Ostensibly, a perusal of bare provisions of Section 200A of the Act show that prior to 01.06.2015, it did not empower the AO to levy the fee prescribed in Section 234E of the Act, while processing the statement of TDS. Thus, the stand of the assessee is borne out of the bare provisions of the Act, as it stood at the relevant point of time. See GAJANAN CONSTRUCTIONS AND OTHERS VERSUS DCIT, CPC (TDS) , GHAZIABAD, UTTARPRADESH AND ITO (TDS) , NASHIK 2016 (10) TMI 92 - ITAT PUNE We charged by the Assessing Officer under Section 234E of the Act while processing the statement under Section 200A of the Act, as being bereft of jurisdiction at the relevant point of time.

Summary

Issues:
Levy of fees u/s. 234E of the Act while processing quarterly TDS statement and passing the intimation u/s. 200A of the Act.

Analysis:

Issue 1: Levy of fees u/s. 234E of the Act

The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) sustaining the levy of fees u/s. 234E of the Act. The Tribunal noted that an identical issue was decided by the Pune Bench, holding that prior to 1.6.2015, late fees u/s. 234E cannot be charged while processing quarterly return u/s. 200A. The Tribunal highlighted that the power to charge fees under section 234E while processing TDS statements was inserted by the Finance Act, 2015, effective from 01.06.2015. The Tribunal emphasized that the amendment to section 200A(1) of the Act is procedural and prospective, not applicable to pending assessments before 01.06.2015. The Tribunal also referred to a judgment by the Karnataka High Court quashing intimation issued under section 200A for late fees under section 234E, stating it has prospective effect. Consequently, the Tribunal held that the intimation issued by the Assessing Officer under section 200A for late fees under section 234E was not valid and deleted the demand.

Issue 2: Application of Judicial Precedents

The Tribunal cited various judgments, including the decision by the Bombay High Court and Karnataka High Court, to support its conclusion. It highlighted that the Bombay High Court upheld the constitutional validity of section 234E of the Act, while the Karnataka High Court deemed the amendment to section 200A(1) as prospective. The Tribunal also mentioned similar views taken by the Tribunal in other cases, such as M/s. P.L.Oswal & Co., Shri Tirathraj J Singh, and Anil J. Gorasia, where late fees under section 234E were deleted for intimation passed before 1.6.2015. The Tribunal, in line with these judgments, allowed the appeal of the assessee and deleted the late fee levied under section 234E for the 4th quarter of the financial year 2013-14.

In conclusion, the Tribunal held that the amendment to section 200A(1) of the Act is prospective in nature, and Assessing Officers were not empowered to charge fees under section 234E for intimation issued before 1.6.2015. The Tribunal, following precedent and legal principles, allowed the appeal and deleted the late fee levied under section 234E.