2016 (3) TMI 406 - AT - Income Tax

Levy of fee under section 234E - Held that - The provisions accepting levy of late filing fees under section 234E have indeed been brought to the statute w.e.f. 1st June, 2015 and the impugned order was passed much before that date. In view of the above discussions and bearing in mind entirety of the case, we hereby delete the levy of late filing fees under section 234E of the Act by way of impugned intimation issued on 11.12.2013. - Decided in favour of assessee

Summary

Issues:
Appeal against levy of fee under section 234E of the Income Tax Act for F.Y. 2012-13.

Detailed Analysis:
The appellant contested the levy of a fee under section 234E of the Income Tax Act for the financial year 2012-13. The appellant had submitted the TDS return late, which was not in dispute. However, the ITAT, Amristar Branch, in the case of Sibia Healthcare Pvt. Ltd. Vs. DCIT, held that the Assessing Officer was not empowered to charge a fee under section 234E while processing under section 200A. This decision was followed by the ITAT, Ahmedabad Bench in various cases. Another case, Shree Harsiddh Seva Samiti Trust Vs. DCIT, also supported the assessee's position based on similar grounds. The ITAT emphasized that the fee under section 234E could not be levied during the processing of the TDS statement under section 200A.

The ITAT referred to the provisions of section 234E, which allows for a fee for defaults in furnishing statements, and section 200A, which deals with the processing of TDS statements. It was noted that post-June 1, 2015, an amendment in section 200A enabled the computation of fees under section 234E during the processing of TDS statements. However, the intimation under section 200A before this amendment did not provide for the levy of fees under section 234E. The ITAT clarified that the adjustment for the levy of fees under section 234E was beyond the permissible scope of adjustments under section 200A before the amendment.

The ITAT concluded that the levy of fees under section 234E was unsustainable in law based on the existing provisions at the relevant time. The intimation under section 200A could only be passed within one year from the end of the financial year in which the TDS statement was filed. As the related TDS statement was filed on February 19, 2014, any levy should have been made by March 31, 2015. Since the impugned levy was issued before the amendment allowing for such fees, it was deemed invalid. Therefore, the ITAT upheld the assessee's grievance and deleted the levy of the fee under section 234E.

In light of the judicial precedent and the absence of enabling provisions for the levy of late filing fees under section 234E before June 1, 2015, the ITAT decided to delete the levy of late filing fees under section 234E for the appellant. The ITAT relied on the Co-ordinate Bench's order and allowed the appeal, providing relief to the assessee.