2019 (11) TMI 1676 - AT - Income Tax

Constitutional 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.

Summary

Issues:
Late filing fees under Sec. 234E for A.Y. 2014-15, A.Y. 2015-16, and A.Y. 2016-17.

A.Y. 2014-15:
The assessee delayed filing the TDS statement for A.Y. 2014-15, leading to the imposition of late filing fees and interest. The CIT(A) upheld the fees under Sec. 234E, citing statutory provisions. The assessee contended that no fee could be levied pre-01.06.2015. The AR relied on legal precedents to support this argument. The ITAT, Mumbai, referred to judgments from Karnataka and Chandigarh, agreeing that fees under Sec. 234E before 01.06.2015 were invalid. Consequently, the late filing fee was set aside, while interest on late payment was upheld.

A.Y. 2015-16:
Similar to A.Y. 2014-15, the assessee faced late filing fees for A.Y. 2015-16. The CIT(A) upheld the fees, rejecting the assessee's argument against pre-01.06.2015 fees. Referring to the previous year's judgment, the ITAT deleted the late filing fees for A.Y. 2015-16.

A.Y. 2016-17:
The appeal for A.Y. 2016-17 challenged late filing fees. The AR did not contest the fees for this year, as they were post-01.06.2015. Consequently, the appeal for A.Y. 2016-17 was dismissed as not pressed.

In conclusion, the ITAT, Mumbai, allowed the appeal for A.Y. 2014-15, set aside the late filing fees for A.Y. 2015-16, and dismissed the appeal for A.Y. 2016-17 due to no contest on late filing fees. The judgments emphasized the invalidity of fees under Sec. 234E before 01.06.2015, aligning with legal precedents and statutory provisions.