2019 (3) TMI 1807 - AT - Income Tax

Levy of late fee u/s 234E - Late filing of TDS returns / statement - statement processed u/s 200A - scope of amendment - HELD THAT - Since the amendment to section 200A of the Act was prospective in nature, the Assessing Officer while processing TDS returns / statements for the period prior to 01.06.2015 was not empowered to charge late filing fees under section 234E even in cases where such TDS returns were filed belatedly after June, 2015 and even in cases where the AO processed the said TDS returns after June, 2015. Accordingly, we hold that intimation issued by Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging late filing fees under section 234E of the Act is not valid and the same is deleted. See M/S GNA UDYOG LTD. 2019 (1) TMI 1757 - ITAT AMRITSAR , MEGHNA GUPTA 2018 (10) TMI 355 - ITAT DELHI and MEDICAL SUPERINTENDENT RURAL HOSPITAL DODI BK AND JUNAGADE HEALTHCARE PVT. LTD. 2018 (10) TMI 1587 - ITAT PUNE - Decided in favour of assessee.

Summary

Issues Involved:
1. Levy of late fee under Section 234E of the Income Tax Act, 1961.
2. Validity of intimation under Section 200A for levying fees under Section 234E for periods prior to the amendment effective from 01/06/2015.

Analysis of Judgment:

1. Levy of Late Fee under Section 234E:
The primary grievance of the assessee was regarding the levy of late fee by invoking the provisions of Section 234E of the Income Tax Act, 1961, in the intimation passed under Section 200A of the Act. The assessee had failed to deduct TDS on a payment made to HSIIDC and subsequently delayed the filing of the TDS statement in Form No. 26QB. The Assessing Officer issued an intimation under Section 200A, raising a demand for late filing fees under Section 234E for the financial years 2013-14 and 2014-15.

2. Validity of Intimation under Section 200A:
The Ld. CIT(A) upheld the action of the Assessing Officer, noting that the levy of fee for default in furnishing TDS statements is governed by Section 234E. It was observed that Section 234E is not punitive but a fixed charge for late filing of TDS statements. The Ld. CIT(A) also referenced the Gujarat High Court's decision in Rajesh Kourani Vs Union of India, which held that the amendment to Section 200A effective from 01/06/2015 is clarificatory and applicable retrospectively.

Tribunal's Findings:
The Tribunal considered various precedents, including decisions from the ITAT Delhi Bench, ITAT Amritsar, and ITAT Pune, which consistently held that the levy of fees under Section 234E prior to the amendment effective from 01/06/2015 was without authority of law. Specifically, the Tribunal noted:

- GNA Udyog Ltd. Vs. Asst. CIT: The ITAT Delhi Bench held that the fee under Section 234E could not be levied for periods prior to 01/06/2015 as the amendment to Section 200A was prospective.
- Meghna Gupta Vs. Asst. CIT: The ITAT Delhi Bench ruled that no fee under Section 234E was leviable for TDS statements filed prior to 01/06/2015.
- Medical Superintendent Rural Hospital Vs. DCIT: The ITAT Pune Bench reiterated that the amendment to Section 200A was prospective and not applicable to periods before 01/06/2015.

The Tribunal also referred to the Karnataka High Court's decision in Fatheraj Singhvi & Ors. Vs. Union of India, which held that the computation and intimation for payment of fees under Section 234E for periods prior to 01/06/2015 were illegal and invalid.

Conclusion:
Based on the consistent judicial precedents, the Tribunal concluded that the Assessing Officer erred in levying fees under Section 234E for periods prior to 01/06/2015. The demands raised for late filing fees under Section 234E for the years under consideration were deleted, and the appeals of the assessee were allowed.

Summary:
The Tribunal allowed the appeals of the assessee, holding that the levy of late fees under Section 234E for periods prior to the amendment effective from 01/06/2015 was without authority of law. The Tribunal followed various judicial precedents that consistently ruled the amendment to Section 200A as prospective, thereby invalidating any fees levied under Section 234E for periods before 01/06/2015.