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2016 (3) TMI 499 - AT - Income TaxLevy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that - We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT 2015 (6) TMI 437 - ITAT AMRITSAR adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
Issues Involved:
1. Wrongly charging late filing fees under Section 234E of the Income Tax Act for financial year 2012-13 (Quarter 2 and Quarter 3). 2. Legality of levying late filing fees prior to the amendment effective from 01-06-2015. Issue-wise Detailed Analysis: 1. Wrongly Charging Late Filing Fees Under Section 234E: The appellant contended that the Assessing Officer (A.O.) and the Commissioner of Income Tax (Appeals) [CIT(A)] erred in law and facts by levying late filing fees under Section 234E of Rs. 5,500/- for Quarter 2 and Rs. 9,375/- for Quarter 3 of the financial year 2012-13. The appellant argued that the Finance Act, 2015, which substituted clauses (c) to (e) of subsection (1) of Section 200A, became effective from 01-06-2015. Therefore, the appellant asserted that prior to this date, there was no provision enabling the levy of fees under Section 234E during the processing of TDS statements under Section 200A. The appellant cited various case laws supporting the position that no penalty could be levied under Section 234E before 01-06-2015, including decisions from the Amritsar Bench of the Tribunal and High Courts of Kerala, Karnataka, Rajasthan, and Bombay. 2. Legality of Levying Late Filing Fees Prior to Amendment Effective from 01-06-2015: The Tribunal examined the relevant statutory provisions and amendments. Section 234E, inserted by the Finance Act 2012, effective from 01-07-2012, imposed a fee for defaults in furnishing TDS statements. Section 200A, as it stood before the amendment by Finance Act 2015, did not allow for the computation of fees under Section 234E during the processing of TDS statements. The Tribunal noted that the amendment effective from 01-06-2015 enabled such computation. The Tribunal referred to the decision of the ITAT Amritsar Bench in the case of Shibia Healthcare Private Limited vs. Dy. CIT (TDS), which held that adjustments for fees under Section 234E were beyond the permissible scope of Section 200A prior to 01-06-2015. The Tribunal emphasized that the CIT(A) should have examined the legality of the adjustment made under the intimation issued under Section 200A, which was not done. The Tribunal concluded that the levy of fees under Section 234E in the intimation issued before 01-06-2015 was unsustainable in law. Conclusion: The Tribunal allowed the appeals of the assessee, directing the A.O. to delete the late filing fees levied under Section 234E for both quarters of the financial year 2012-13. The Tribunal's decision was based on the legal position that, prior to the amendment effective from 01-06-2015, there was no enabling provision under Section 200A for levying fees under Section 234E. The Tribunal's order was pronounced on 10th February 2016 at Ahmedabad.
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