2019 (1) TMI 1711 - AT - Income Tax

Levy of late fee u/s 234E - demanding the late fees through an intimation u/s 200A - HELD THAT - Section 200A which was brought w.e.f. 01.06.15 is an enabling provision which empowers the AO to determine fee u/s 234E of the Act and is prospective in nature. Hence no computation of fee for demand or intimation for fee u/s 234E could be made for TDS deducted for assessment year prior to 01.06.15. Moreover no contrary judgments have been brought on record before us in order to controvert or rebut the legal proposition set out in DHARAM DEEP PUBLIC SCHOOL U/S DHARAM DEEP EDUCATIONAL AND WELFARE SOCIETY KAM AIR CO. LTD. VERSUS 2018 (1) TMI 334 - ITAT DELHI SIBIA HEALTHCARE PRIVATE LIMITED 2015 (6) TMI 437 - ITAT AMRITSAR AND VATIKA TOWNSHIP PRIVATE LIMITED 2014 (9) TMI 576 - SUPREME COURT - Decided in favour of assessee.

Summary

Issues:
Appeal against order of Ld. CIT (Appeal) for AY 2015-16 regarding levy of late fee u/s 200(3) of the Act.

Analysis:
The appeal was filed by the assessee against the order of Ld. CIT (Appeal) for AY 2015-16 regarding the fee levied for delay in furnishing the statement u/s 200(3) of the Act. The assessee claimed that the TDS amount and interest were for a period before the provisions of late fee levy were applicable. The amendment u/s 200A of the Act was argued to have prospective effect, making the order demanding late fee legally invalid.

The Ld. CIT(A) had held that Section 234E was inserted by the Finance Act 2012, making a person liable for a fee for failure to deliver a statement on time. The late fee provision under Section 234E was deemed applicable despite the absence of an enabling authority through an intimation u/s 200A. The judgments cited supported the view that the levy of late fee u/s 234E could not be challenged by the assessee.

The ITAT considered various judgments and legal propositions presented by both parties, including the enabling provision of section 200A effective from 01.06.15. It was concluded that no fee computation for TDS deducted before 01.06.15 could be made under section 234E. The absence of contrary judgments to challenge the legal propositions cited in the judgments led to the decision that the levy of fee u/s 234E in the present case was unsustainable in law. Consequently, the appeal was allowed, and the impugned levy of fee u/s 234E was deleted.

In conclusion, the ITAT upheld the grievance of the assessee, ruling that the levy of fee u/s 234E of the Act in this case was unsustainable in law. The appeal was allowed with no order as to costs.