2018 (10) TMI 1774 - AT - Income Tax

Levy of fees u/s 234E - delay in filing TDS returns - intimation u/s 200A - Held that - As decided in M/s Terra Infra Development Ltd. 2018 (10) TMI 285 - ITAT HYDERABAD relying in M/S SONALAC PAINTS COATINGS LTD. AND M/S NAGPAL TRADING CO., VERSUS THE DCIT, CPC (TDS) , VAISHALI, CHANDIGARH 2018 (6) TMI 303 - ITAT CHANDIGARH the provisions of Section 234E for levy of fees on account of late filing of TDS returns was brought on the Statute vide Finance Act, 2012 w.e.f. 01.07.2012 and also that Section 200A, which deals with the processing of TDS returns, gave no mandate to make adjustments on account of levy of fees u/s 234E prior to 01.06.2015 and that the same was brought on the Statute only vide Finance Act, 2015 w.e.f. 01.06.2015. Respectfully following the decision in the case of Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT we hold that the fees levied in all the present cases u/s 234E prior to 01.06.2015 in the intimations made u/s 200A was without authority of law and the same is, therefore, directed to be deleted. All the appeals of the assessee stand allowed.

Summary

Issues:
Late fee u/s 234E levied on TDS return, condonation of delay in filing appeal, inclusion of late fee u/s 234E in intimation u/s 200A, validity of late fee levy before Finance Act 2015.

Analysis:
In the case involving ITA No. 177/Hyd/2018, the assessee appealed against the late fee u/s 234E levied on the TDS return. The CIT(A) rejected the appeal, citing that the delay in filing the appeal was not condoned due to misconstrued arguments by the appellant. However, the appellate tribunal set aside the CIT(A) order, directing to condone the delay and adjudicate the appeal on merits after providing a reasonable opportunity to the assessee. The tribunal found it necessary to meet the ends of justice by allowing the appeal for statistical purposes.

Moving on to ITA No. 178/Hyd/2018, the AO levied late fee u/s 234E on the assessee's TDS return. The assessee contended that including late fee u/s 234E in the intimation u/s 200A was impermissible before the Finance Act 2015. The CIT(A) upheld the AO's action, referring to a judgment of the Gujarat High Court. However, the appellate tribunal referred to a similar case where it was held that prior to 1.6.2015, the levy of late fee u/s 234E on TDS returns was without authority of law. Consequently, the tribunal directed the AO to delete the late fee imposed u/s 234E, allowing the appeal.

In conclusion, both appeals were allowed, with the tribunal setting aside the CIT(A) orders and directing the deletion of late fee u/s 234E in both cases. The judgments were pronounced on 26th October 2018.