2016 (9) TMI 397 - AT - Income Tax

Levy 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. 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.

Summary

Issues:
Challenging correctness of orders upholding levy of fees under section 234E of the Income Tax Act, 1961 on assessees through intimations issued under section 200A for processing of TDS for respective Assessment Years.

Detailed Analysis:

Issue 1: Levy of Late Filing Fees under Section 234E
The 35 appeals challenged the correctness of orders upholding the levy of late filing fees under section 234E during the processing of TDS returns under section 200A. The contention was that the levy was erroneous based on the facts and circumstances of the case.

Analysis: The Tribunal considered the legal position and observed that the issue was covered in favor of the assessees by a previous decision of ITAT Amritsar Bench in a specific case. The Tribunal highlighted the provisions of section 234E, which imposes a fee for defaults in furnishing statements. It was noted that the law prior to June 2015 did not enable the levy of fees under section 234E during the processing of TDS statements under section 200A.

Issue 2: Scope of Adjustments under Section 200A
The question arose whether the adjustment for the levy of fees under section 234E was within the permissible scope of adjustments under section 200A, especially considering the amendment post-June 2015.

Analysis: The Tribunal emphasized that prior to June 2015, no provision allowed for the levy of fees under section 234E during the processing of TDS statements under section 200A. It was concluded that such an adjustment was beyond the scope of permissible adjustments under section 200A as it existed at that time.

Outcome:
The Tribunal, guided by legal provisions and precedents, deleted the levy of late filing fees in all 35 appeals under section 234E of the Act. The decision was based on the understanding that the levy was unsustainable in law due to the absence of enabling provisions for such adjustments during the processing of TDS statements. Consequently, all 35 appeals were allowed, providing relief to the assessees.