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2021 (7) TMI 1373 - AT - Income TaxLevy of late fee u/s 234E - Levying late fee charges for delay in furnishing statement of tax deducted at source (TDS) - HELD THAT - On perusal of ground of appeal, we find that the assessee has raised multiple grounds of appeal challenging the validity of order passed by lower authorities - in our view the substantial grounds of appeal is whether the lower authorities are justified in charging late fee on late furnishing the statements of TDS of various quarters of different assessment years. There is no dispute that the assessee made TDS statement furnished by the assessee in all quarters were prior to 01-06-2015. The Hon ble Karnataka high Court in Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT was held that the amendment in section 200A has come into effect on 01.06.2015 and has prospective effect no computation of fee for the demand or the intimation for fee under section 234E can be made for TDS deducted prior to 01.06.2015, hence the demand of fee under section 234E is without authority of law. So far as reliance by Ld. DR for the revenue in case of Rajesh Kourani 2017 (7) TMI 458 - GUJARAT HIGH COURT is concern, we find that the Hon'ble High court in said case upheld the constitutional validity and also held that fee prescribed under section 234E could be levied even without regulatory provision. We further find that after the decision of Rajesh Kourani 2017 (7) TMI 458 - GUJARAT HIGH COURT the coordinate bench of Tribunal by following the order in Fatheraj Singhvi vs UOI(supra) held that the provisions of section 234E are not retrospective, some of the case as relied by Ld. AR for the assessee, which we have referred in para- (supra). In the result the ground of appeal raised by the assessee is allowed.
Issues:
Late fee charges for delay in furnishing TDS statements for various quarters for assessment years 2013-14 to 2015-16. Analysis: 1. The group of 22 appeals by the assessee challenged the order of the Commissioner of Income Tax (Appeals) regarding the levy of late fee charges for delayed TDS filings. The appeals were clubbed together, and the facts of one appeal were treated as the lead case for appreciation of facts. 2. The assessee was required to deduct TDS on certain payments but faced delays in filing TDS statements for various quarters. The Central Processing Center levied late fee charges and interest for the delays. The aggrieved assessee appealed the levy before the Commissioner of Income Tax (Appeals). 3. The Commissioner of Income Tax (Appeals) dismissed all appeals, citing a previous judgment by the Gujarat High Court that upheld the validity of section 234E for levying fees for default in filing statements. The assessee then appealed to the Appellate Tribunal. 4. The Appellate Tribunal heard arguments from both parties. The assessee contended that the late fee under section 234E was inserted with effect from 01.06.2015 and should not apply to TDS returns filed before that date. Citing a judgment by the Karnataka High Court, the assessee argued that no fee could be computed for TDS deducted before 01.06.2015. 5. The Revenue supported the lower authorities' decision, emphasizing the applicability of sections 234E and 200A of the Income Tax Act. The Revenue relied on the Gujarat High Court's decision in a similar case. 6. The Appellate Tribunal analyzed the grounds of appeal and focused on whether the late fee charges were justified for TDS statements filed before 01.06.2015. Relying on the Karnataka High Court's judgment, the Tribunal found that the fee demand under section 234E was unauthorized for TDS deducted before the specified date. 7. The Tribunal noted the Gujarat High Court's decision upholding the constitutional validity of section 234E but emphasized the non-retrospective nature of the provisions. Following the Karnataka High Court's ruling, the Tribunal allowed the assessee's appeal, as the fee demand was deemed without legal authority. 8. Consequently, the Tribunal allowed all appeals filed by the assessee with similar observations, ruling in favor of the assessee based on the non-retrospective application of section 234E. 9. In conclusion, all appeals were allowed by the Tribunal, with the order pronounced during virtual court proceedings on 1st July 2021.
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