2018 (11) TMI 1931 - AT - Income Tax

Late filing levy u/s 234E - intimations u/s 200A - As per assessee prior to 01/06/2015 such inclusion of late fee u/s 234E in the intimation u/s 200A is not permissible under the law - HELD THAT - We find that similar issue came up for consideration in the case of M/s Terra Infra Development Ltd. 2018 (10) TMI 285 - ITAT HYDERABAD as held levy of fees u/s 234E while processing returns, TDS u/s 200A prior to 01.06.2015 was without any authority of law. Thus in the present case we find that the TDS returns filed by the assessee for the relevant period i.e., FYs 2012-13 to 2014-15 were prior to 01/06/2015. Therefore, we set aside the orders of CIT(A) and direct the ACIT CPC TDS to delete the fees levied u/s 234E. Decided in favour of assessee.

Summary

Issues:
Late filing levy under section 234E in TDS returns filed before 01/06/2015.

Analysis:
The appeals were filed against the orders of CIT(A) regarding the late filing levy under section 234E for the assessment years 2013-14 to 2015-16. The issue revolved around the inclusion of late fees under section 234E in the intimation under section 200A of the Income Tax Act. The assessee argued that such inclusion was impermissible before 01/06/2015, as it came into effect only through the Finance Act, 2015. The CIT(A) upheld the late filing levy based on the judgment of the Hon'ble Gujarat High Court in a similar case. The Tribunal referred to a previous case and held that prior to 01/06/2015, there was no mandate to adjust fees under section 234E while processing TDS returns under section 200A. Citing conflicting judgments, the Tribunal favored the assessee, following the rule that construction favoring the assessee should be adopted when two reasonable interpretations are possible. Consequently, the Tribunal directed the deletion of the late filing fees levied under section 234E for returns filed before 01/06/2015.

This judgment clarifies that the inclusion of late fees under section 234E in the intimation under section 200A of the Income Tax Act was impermissible before 01/06/2015. The Tribunal emphasized that the power to levy fees under section 234E while processing TDS returns under section 200A only came into effect from 01/06/2015 onwards. By considering precedents and conflicting High Court judgments, the Tribunal ruled in favor of the assessee, directing the deletion of late filing fees for TDS returns filed before 01/06/2015. The decision underscores the importance of statutory interpretation in favor of the taxpayer when multiple reasonable interpretations exist.