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2019 (6) TMI 1575 - AT - Income TaxLate filing fee u/s 234E - Delay in filing TDS return - assessee company filed returns of TDS in form No. 26QB for the 3rd quarter of 2014 on 27/12/2014 whereas the due date of filing of the said return was on 07/06/2014 and thus there was delay of 203 days - whether the return was processed prior to 01.06.2015 or not? - HELD THAT - As held in SRI. FATHERAJ SINGHVI 2016 (9) TMI 964 - KARNATAKA HIGH COURT that when the statute confers no express power under section 200A before 01.06.2015 on the authority either to compute and collect any fee under section 234E the demand for the period before 01.06.2015 could not be sustained. We feel it appropriate to restore the issue in dispute to the file of learned CIT(A) to ascertain the date of processing of return and provide a copy of the said order of processing to the assessee and decide the issue in accordance with law after affording adequate opportunity of being heard to both the parties - Appeal of the assessee is allowed for statistical purposes.
Issues Involved:
1. Levy of late filing fee under section 234E of the Income Tax Act, 1961. 2. Opportunity to the assessee before passing a rectification order under section 154/200A. 3. Processing of TDS returns prior to the amendment effective from 01/06/2015. Issue-wise Detailed Analysis: 1. Levy of Late Filing Fee under Section 234E: The core issue in this appeal is whether the Ld. CIT(A) was justified in confirming the levy of late fee under section 234E of the Act for the delayed filing of TDS returns. The appellant argued that the late fee under section 234E could only be levied prospectively from 01/06/2015, as per the amendment by the Finance Act, 2015. The appellant relied on the Karnataka High Court decision in Fatehraj Singhvi Vs. UOI, which held that no late fee could be levied for returns processed prior to 01/06/2015. Conversely, the Ld. CIT(A) relied on the Gujarat High Court decision in Rajesh Kourani Vs. UOI, which upheld the levy of late fee under section 234E even for periods before 01/06/2015, as the charging section 234E came into effect from 01/06/2012. 2. Opportunity to the Assessee Before Passing Rectification Order: The appellant contended that the rectification order under section 154/200A was passed without providing an opportunity to be heard. The appellant claimed that no original order under section 200A was provided, and only the rectification order levying the late fee was received. This procedural lapse was argued to be against the principles of natural justice. 3. Processing of TDS Returns Prior to Amendment Effective from 01/06/2015: The Tribunal noted that the amendment to section 200A, effective from 01/06/2015, allowed for the computation of fees under section 234E during the processing of TDS returns. The Tribunal highlighted the distinction between the filing and processing of returns. In the present case, the return was filed on 27/12/2014 and processed later. The Tribunal referred to the Supreme Court's principle that in cases of conflicting High Court decisions, the one favorable to the assessee should be followed. The Tribunal cited the Agra Bench decision in Sudarshan Goyal vs. DCIT (TDS), which favored the assessee by following the Karnataka High Court's decision, asserting that no late fee could be levied for returns processed before 01/06/2015. Conclusion: The Tribunal decided to restore the issue to the file of the Ld. CIT(A) to ascertain the date of processing of the return and provide a copy of the processing order to the assessee. The Ld. CIT(A) was directed to decide the issue in accordance with the law after affording adequate opportunity of being heard to both parties. The appeal of the assessee was allowed for statistical purposes. Order Pronouncement: The order was pronounced in the open court on 24th June, 2019.
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