2017 (10) TMI 1504 - AT - Income Tax

Late filing fee u/s 234E - intimation u/s 200A - HELD THAT - Issue 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. The impugned levy of fees under section 234E is unsustainable in law. We therefore delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.

Summary

Issues:
1. Late filing fee under section 234E imposed by DCIT (TDS) Central Processing Cell.
2. Power of DCIT (TDS) to levy late filing fee in intimation under section 200A of the Income Tax Act, 1961.
3. Validity of orders passed by DCIT and CIT(A).

Detailed Analysis:
Issue 1: The appellant contested the late filing fee of ?49,400 imposed by the DCIT (TDS) Central Processing Cell under section 234E. The appellant argued that the fee was unjustified as it exceeded the tax deductible amount. The late fee was levied for the delay in filing the second quarterly statement for the Financial Year 2014-15. The appellant challenged this fee through an appeal to the Ld. CIT(A), who upheld the late fee, leading to the current appeal.

Issue 2: The appellant further contended that the DCIT (TDS) Central Processing Cell lacked the authority to levy such a late filing fee in the intimation under section 200A of the Income Tax Act, 1961. The appellant cited a judgment by the Hon'ble Karnataka High Court to support their argument. The High Court's judgment held that the amendment under section 200A, effective from June 1, 2015, had prospective application and did not allow for the computation of fees for TDS deducted before this date. The appellant sought similar treatment based on this interpretation.

Issue 3: The arguments presented by both parties were evaluated by the ITAT, Amritsar Bench. Referring to a previous judgment in the case of SIBIA HEALTHCARE (P) Ltd., the ITAT held that intimation issued under section 200A for demanded fees under section 234E was not valid if issued before June 1, 2015. The ITAT also considered the Karnataka High Court's ruling and concluded that late fees could not be levied for periods preceding June 1, 2015. Consequently, the ITAT allowed the appeal filed by the assessee, thereby setting aside the late fee of ?49,400 imposed by the CPC (TDS).

In conclusion, the ITAT ruled in favor of the assessee, highlighting the prospective application of the relevant amendment and the inability to levy late fees for periods before June 1, 2015, as per the legal interpretations provided by the Karnataka High Court and previous judgments.