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2019 (2) TMI 1959 - AT - Income TaxConstitutional Validity of Section 234E - Late filing fee under Section 234E - exercise of power u/s 200A - charging of fees payable u/s 234E prior to amendment to section 200A(1)(c) of the Act vide Finance Act 2015 w.e.f. 01.06.2015 while processing the TDS returns - HELD THAT - As decided in SRI. FATHERAJ SINGHVI AND OTHERS VERSUS UNION OF INDIA AND OTHERS 2016 (9) TMI 964 - KARNATAKA HIGH COURT Amendment to section 200A(1) of the Act is prospective in nature and therefore the AO while processing the TDS statements/ returns in the present three appeals for the period prior to 01.06.20 15 was not empowered to charge fees under section 234E - Therefore the intimations issued by the AO under section 200A of the Act in these appeals are unsustainable and the demand raised by way of charging of the fees under section 234E of the Act not being valid is deleted. - we hold that the AO is not empowered to charge fees under section 234E of the Act by way of intimations issued u/s 200A of the Act in respect of defaults before 01.06.2015 - Decided in favour of assessee.
Issues:
1. Confirmation of demand of late filing fees u/s.234E of the Act by CIT(A). Analysis: The appeal by the assessee was against the order of the CIT(A) confirming the demand of Rs. 28,000 as late filing fees u/s.234E of the Act. The assessee filed the TDS return for F.Y. 2015-2016 on 27.03.2015, with a delay of 140 days from the due date of 07.11.2014. The TDS amount of Rs. 2,52,530 along with interest of Rs. 22,725 was paid on 30.03.2015. The assessee claimed the delay was unintentional due to lack of professional assistance and requested the cancellation of the late filing fee. However, the AO levied the late filing fee of Rs. 28,000. The CIT(A) upheld the AO's decision, stating the delay was on the part of the assessee, and the return was processed post-June 2015, justifying the late fee. In the appellate proceedings, the CIT(A) held that the delay by the assessee was evident, and the return processing post-June 2015 justified the late fee. The assessee argued against the penalty, citing timely TDS payment and lack of intentional delay. The CIT(A) relied on the AO's order, emphasizing the delay and processing date of the return. The assessee's contention was that the penalty was not applicable as all payments were made, and the delay was unintentional. The CIT(A) confirmed the late fee, leading to the appeal. During the proceedings, the assessee presented various decisions in support of their case, referencing cases like Sibia Healthcare Pvt. Ltd. and Maharashtra Cricket Association, among others. The appellate tribunal analyzed the situation, considering whether the penalty u/s.234E was applicable for a return filed pre-June 2015. Following the Karnataka High Court's ruling in Fatheraj Singhvi Vs. Union of India, which stated that no late fee should be imposed for TDS prior to 1.6.2015, the tribunal reversed the CIT(A)'s decision. Consequently, the tribunal directed the AO to delete the demand for late filing fee u/s.234E of the Act. In conclusion, the tribunal allowed the appeal of the assessee, based on the interpretation of the relevant provisions and judicial precedents. The decision highlighted the importance of legal interpretations and precedents in determining the applicability of penalties under tax laws.
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