2019 (6) TMI 1412 - AT - Income Tax

Levying late fees u/s 234E while processing the statement of tax deducted at source u/s 200A (before the amendment was brought in w.e.f. 01.06.2015 in the provisions of section 200A of the Act) - HELD THAT - As relying on State Bank of India, Genda Chowk and others 2018 (11) TMI 1714 - ITAT INDORE and M/s. Madhya Pradesh Power Transmission Ltd. and others Vs. DCIT (TDS) 2018 (12) TMI 1323 - ITAT INDORE are of the view that Ld. CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings of Ld. CIT(A) in all these 29 appeals are set aside and revenue is directed to delete the levy of fees u/s 234E of the Act in all these 29 cases. Thus, common issue raised in this bunch of 29 appeals is decided in favour of the assessee.

Summary

Issues Involved:
1. Whether the Revenue authorities were justified in levying late fees under section 234E of the Income Tax Act while processing the statement of tax deducted at source under section 200A of the Act before the amendment effective from 01.06.2015.

Issue-wise Detailed Analysis:

1. Justification of Levying Late Fees under Section 234E Before Amendment:

Background:
The appellant was required to file the statement of tax deducted at source (TDS) for the respective quarter but failed to do so within the prescribed due date. As per section 234E of the Act, a fee for default in furnishing the statement is leviable if the TDS statements are not delivered within the time prescribed. The Revenue authorities levied late fees for default in furnishing the statement while processing the TDS statement under section 200A of the Act. The assessees contested this levy, arguing that before the amendment brought by the Finance Act, 2015 effective from 01.06.2015, the Revenue authorities did not have the power to levy late fees under section 234E in the statement processed under section 200A.

Tribunal's Observations:
The Tribunal noted that the common issue in all appeals was whether the CIT(A) was justified in confirming the levy of late fees under section 234E in the statement of TDS processed under section 200A, especially considering the amendment effective from 01.06.2015.

Precedents Cited:
The Tribunal referred to several decisions of the Coordinate Bench, including:
- Mentor India Limited vs. DCIT
- Sudershan Goyal vs. DCIT (TDS)
- State Bank of India, Gwalior vs. CIT(A)
- State Bank of India, Genda Chowk and others vs. DCIT (TDS)
- M/s. Madhya Pradesh Power Transmission Ltd. & others vs. DCIT (TDS)

These decisions consistently held that the amendment brought in by the Finance Act, 2015, effective from 01.06.2015, was prospective in nature. Therefore, no computation for fee demand or intimation under section 234E could be made for TDS deducted in statements prepared prior to 01.06.2015 and processed under section 200A.

Legal Reasoning:
The Tribunal relied on the judgment of the Hon'ble Karnataka High Court in the case of Fatehraj Singhvi vs. UOI, which favored the assessee, and the judgment of the Hon'ble Gujarat High Court in Rajesh Kaurani vs. UOI, which held against the assessee. Following the principle established by the Hon'ble Supreme Court in CIT vs. Vatika Township Pvt. Ltd. and CIT vs. Vegetable Products Ltd., the Tribunal adopted the view favoring the assessee in cases of conflicting opinions.

Conclusion:
The Tribunal concluded that the amendment to section 200A effective from 01.06.2015 was prospective. Consequently, no late fees under section 234E could be levied for TDS statements processed under section 200A before this date. The Tribunal set aside the findings of the CIT(A) and directed the Revenue to delete the levy of fees under section 234E in all the cases.

Outcome:
All 29 appeals by the assessees were allowed, and the levy of late fees under section 234E was canceled.

Order Pronouncement:
The order was pronounced in the open court on 06.06.2019.