2019 (12) TMI 1563 - AT - Income Tax

Late fee u/s 234E - delay of 390 days in filing of TDS statements has been occurred - imposition of late fee for delay in filling of TDS statement(s) prior to amendment by way of finance Act 2015 which came into effect from 1st June 2015 - whether the late can be imposed for the period prior to 1st June 2015 when the Amendment was made vide Finance Act 2015 and as to whether there was enabling provisions for levy of late fee prior to 1st June 2015? - HELD THAT - Considering the facts of the instant case are identical to the facts of the orders passed by Hon ble Karnataka High Court in the case of Fatheraj Singhvi Ors. 2016 (9) TMI 964 - KARNATAKA HIGH COURT and M/s. M.G.N. Khalsa High School Jalandhar 2019 (8) TMI 99 - ITAT AMRITSAR and in the case of SIBIA HEALTHCARE (P) Ltd. 2015 (6) TMI 437 - ITAT AMRITSAR we are of the considered opinion that late fee for the delay in filing the TDS statements cannot be levied for the period prior to 1st June 2015 hence we are inclined to delete the late fee imposed by the AO and affirmed by the ld. CIT(A). Consequently the appeal is liable to be allowed.

Summary

Issues:
Appeals against orders passed by Ld. CIT(A) regarding imposition of late fee for delay in filing TDS statements.

Analysis:
The appeals involved identical issues concerning the imposition of late fees for delays in filing TDS statements. The primary question was whether late fees could be imposed for periods before the amendment introduced by the Finance Act, 2015, effective from 1st June 2015, and whether there were enabling provisions for such levy before the said date.

The Co-ordinate Bench, in a previous case, analyzed the law provisions and referred to the judgment of the Gujrat High Court in Rajesh Kourani case, concluding that late fee provisions under section 234E applied only after 1st June 2015 when enabling provisions were introduced. Thus, no late fee could be levied for delays in filing TDS returns processed before the said date.

Additionally, the ITAT, Amritsar Bench in a separate case, held that intimation for fee demand under section 234E before 1st June 2015 was not valid. Despite conflicting judgments, the principle laid down by the Hon'ble Apex Court in CIT Vs. Vegetable Products was followed, favoring the assessee in case of ambiguity in taxing provisions.

Referring to the judgment of Hon'ble Karnataka High Court, it was established that the amendment from 1st June 2015 had prospective effect, not retroactive. Therefore, the demand for fee under section 234E for periods before 1st June 2015 was not valid. Citing consistency with previous judgments, the late fees imposed were deemed inapplicable for the period before the said amendment, leading to the allowance of all appeals filed by the assessee.

In conclusion, the late fee for delayed TDS statements could not be levied for periods before 1st June 2015, as per the legal analysis and precedents cited. Hence, the appeals were allowed, and the late fees imposed were deleted.

Order pronounced on 17/12/2019.