2017 (3) TMI 1804 - AT - Income Tax

Levy of fee u/s 234E - late filing of quarterly e-TDS return u/s 200(3) - HELD THAT - After analysis of the provisions of section 200A 234E of the Act and further by relied upon certain judicial precedents including the decision of Hon ble Supreme Court in the case of Alom Extrusions Ltd. ( 2009 (11) TMI 27 - SUPREME COURT ) and Rajeender Kumar Vs. CIT ( 2013 (7) TMI 454 - DELHI HIGH COURT) held that though sub-clause (c) inserted from 1.6.2015, it being declaratory and creative in nature, can be applied retrospectively, accordingly, the provisions of section 234E of the Act being the machinery section is applicable for levy of late fee for belated filing of TDS statements, even before insertion of sub-clause (c) in section 200A of the Act, by the Finance Act, 2015 w.e.f. 1.6.2015. Respectfully following the decision of coordinate bench, in the case of M/s. Chillapalli Exports Pvt. Ltd. ITO (TDS), TDS Ward-1, Guntur ( 2017 (2) TMI 857 - ITAT VISAKHAPATNAM ) , we direct the A.O. to delete additions made towards late filing fee payable u/s 234E of the Act for belated filing of TDS statements u/s 200(3) of the Act.

Summary

Issues:
Levy of fee u/s 234E of the Income Tax Act for late filing of quarterly e-TDS return.

Analysis:
The appeals were filed against orders of CIT(A)-2, Guntur for assessment years 2013-14 & 2014-15. The issue focused on the levy of fee u/s 234E of the Income Tax Act for late filing of quarterly e-TDS return u/s 200(3) of the Act. The assessee argued that the demand for late filing fee u/s 234E cannot be raised through processing of TDS statements as section 200A of the Act does not cover late fee default. The CIT(A) considered the explanations and judicial precedents, including the decision of the Honorable Supreme Court and Delhi High Court, and held that section 234E is applicable for the levy of late fee even before the insertion of sub-clause (c) in section 200A by the Finance Act, 2015. The CIT(A) order was challenged by the assessee.

Judgment:
None appeared for the assessees during the hearing. The Ld. D.R. submitted that the issue in these appeals aligns with a previous decision of ITAT, Visakhapatnam in the case of Chillapalli Exports Pvt. Ltd. Vs. ITO (TDS), where it was held that without an enabling provision in section 200A before the insertion of sub-clause (c), adjustments cannot be made for late fee u/s 234E for TDS statements filed before 1.6.2015. The Tribunal directed the AO to delete the late fee additions, following the decision of the coordinate bench. Consequently, the appeals in ITA Nos. 7, 8, 17, 18 & 22/Vizag/2016 were allowed, and the late filing fee payable u/s 234E of the Act was directed to be deleted.

This judgment clarifies the applicability of section 234E for the levy of late fees on belated filing of TDS statements and highlights the significance of enabling provisions in the Income Tax Act machinery.