2022 (2) TMI 1341 - AT - Income Tax

Levy of late filing fee u/s 234E - quarterly return filed by the tax deductor for the period prior to 01.06.2015 - HELD THAT - We find that the assessment years involved are prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid. Hence, by respectfully following the decision of Fatheraj Singhvi v. Union of India 2016 (9) TMI 964 - KARNATAKA HIGH COURT we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Since, late fee charged in the present case pertaining to the financial year 2013-14, we direct the Assessing Officer to delete the late fee charged under section 234E of the Act in the intimation issued under section 200A of the Act for the processing of quarterly TDS return filed by the assessee. Appeals filed by the assessee are allowed.

Summary

Issues:
Late filing fee under section 234E of the Income Tax Act for TDS quarterly returns filed beyond the due date specified under the Act.

Analysis:
The appeals were against orders passed by the Commissioner of Income Tax (Appeals) related to assessment years 2014-15 for TDS quarterly returns filed beyond the due date. The Assessing Officer had levied late filing fees under section 234E of the Income Tax Act. The main issue was whether the Assessing Officer could levy late fees under section 234E when the law was amended by the Finance Act, enabling the computation of late fees while processing TDS returns under section 200A of the Act. The provision of section 234E was inserted into the statute by the Finance Act, providing for late fee levies for belated filing of quarterly returns by the tax deductor. The Assessing Officer started levying late fees under section 234E while processing quarterly TDS returns and issuing intimation to the assessees. The issue had been challenged in various courts, with some granting stays on the operation of intimation. The Karnataka High Court and Kerala High Court held that late fees under section 234E could not be levied for periods before 01.06.2015 due to the absence of enabling provisions in section 200A.

The Tribunal found that the assessment years involved were before 01.06.2015, and thus, the late fees charged by the Assessing Officer under section 234E while processing quarterly TDS returns were without authority and invalid. Following the decision of the Karnataka High Court, the Tribunal concluded that the Assessing Officer could not levy late fees under section 234E while processing TDS returns under section 200A up to the financial year 2014-15. Therefore, the late fees charged for the financial year 2013-14 were directed to be deleted by the Assessing Officer in the intimation issued for processing the quarterly TDS returns.

In conclusion, all the appeals filed by the assessee were allowed, and the late fees charged under section 234E for the financial year 2013-14 were directed to be deleted by the Assessing Officer.