2020 (3) TMI 1249 - AT - Income Tax

Levy of penalty u/s 234E - intimation under Section 200A - fees u/s 200A read with section 234E levied prior to 01.06.2015 - HELD THAT - If there is a divergence of opinion between different Hon ble High Courts on an issue the one in favour of the assessee needs to be followed as laid down by the Hon ble Supreme Court in the case of Vegetable Products Ltd 1973 (1) TMI 1 - SUPREME COURT In light of the effective date of amendment i.e. 01.06.2015 and considering the decision of SRI. FATHERAJ SINGHVI AND OTHERS VERSUS UNION OF INDIA AND OTHERS 2016 (9) TMI 964 - KARNATAKA HIGH COURT we direct the Assessing Officer to delete the fee levied u/s 234E of the Act in both the appeals of the assessee.

Summary

Issues:
Levy of penalty under section 234E of the Income Tax Act, 1961.

Analysis:
The judgment involves two separate appeals by the same assessee against the common order of the CIT(A) - 41, New Delhi, pertaining to the assessment year 2014-15. The main issue raised by the assessee was the confirmation of the levy of penalty under section 234E of the Income Tax Act, 1961. Despite the absence of representation from the assessee, the tribunal proceeded ex-parte and carefully reviewed the orders of the authorities below.

The contention of the assessee was based on the provisions of section 234E, arguing that the late fee should have been paid before delivering a TDS statement and cannot be recovered later if the statement was accepted without late fee. The Finance Act, 2015, amended section 200A to empower the Assessing Officer to levy fees under section 234E. The assessee argued that prior to 01.06.2015, the authority to levy fees under section 234E was not present, making the levy beyond the scope of section 200A.

The tribunal considered the written contentions of the assessee and referred to a judgment by the Hon'ble High Court of Karnataka in a similar matter. The court observed that prior to 01.06.2015, there was no authority to compute and determine the fee under section 234E. A co-ordinate bench decision further supported this view, emphasizing that no fee was leviable under section 234E before 01.06.2015 if the statement was furnished promptly after depositing all the tax without delay.

Additionally, the tribunal highlighted the principle that in case of conflicting decisions by different High Courts, the one favoring the assessee should be followed, citing the precedent set by the Hon'ble Supreme Court. In light of the effective date of the amendment and the decisions of the High Courts, the tribunal directed the Assessing Officer to delete the fee levied under section 234E in both appeals of the assessee, ultimately allowing both appeals.

In conclusion, the tribunal ruled in favor of the assessee, emphasizing the inapplicability of the fee under section 234E before 01.06.2015 and directing the deletion of the levy in both appeal cases.