2016 (9) TMI 960 - 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 involved:
Delay in filing appeal, Condonation of delay, Levy of late fees under Section 234E, Jurisdiction of Assessing Officer, Amendment to Section 200A, Enabling provision for raising demand, Applicability of Section 200A, Judicial precedents on levy of fees under Section 234E.

Analysis:

1. Delay in filing appeal and Condonation of delay:
The appeal was filed with a delay of 3 days, for which the assessee society submitted a condonation petition. The affidavit filed by Sr. Mary Jincy, the President of the assessee society, convinced the tribunal that the delay was not deliberate, and there were valid reasons for the delay. The tribunal, therefore, condoned the delay and proceeded to hear the appeal on merits.

2. Levy of late fees under Section 234E:
The issue revolved around the imposition of late fees under Section 234E of the Income Tax Act on the assessee society for delays in filing TDS statements. The tribunal noted that prior to 1st June 2015, there was no enabling provision for raising a demand for late fees under Section 234E through Section 200A. Citing judicial precedents, including the decisions of the Amritsar, Ahmedabad, and Chennai Benches of the Tribunal, the tribunal held that the levy of late filing fees under Section 234E was beyond the permissible adjustments contemplated under Section 200A. Consequently, the tribunal deleted the levy of late filing fees under Section 234E.

3. Jurisdiction of Assessing Officer:
The tribunal observed that the Assessing Officer had exceeded his jurisdiction in levying late fees under Section 234E while processing the TDS statement and making adjustments under Section 200A. The tribunal held that such actions were unsustainable in law, as there was no enabling provision for such levy prior to 1st June 2015.

4. Amendment to Section 200A and Enabling provision for raising demand:
The tribunal discussed the amendment to Section 200A of the Income Tax Act brought about by the Finance Act, 2015, effective from 1st June 2015. Post this amendment, adjustments could be made in respect of late fees under Section 234E during the processing of TDS statements. However, the tribunal emphasized that prior to this amendment, there was no provision enabling the levy of fees under Section 234E through Section 200A.

5. Applicability of Section 200A and Judicial precedents:
The tribunal relied on judicial precedents from various benches of the Tribunal, including the Amritsar, Ahmedabad, and Chennai Benches, to support its decision to delete the levy of late filing fees under Section 234E. The tribunal followed the reasoning of these benches, which held that the levy of fees under Section 234E was beyond the scope of permissible adjustments under Section 200A before the amendment in June 2015.

In conclusion, the tribunal allowed the appeal filed by the assessee, deleted the levy of late filing fees under Section 234E, and dismissed the stay petition as it became infructuous due to the favorable decision on the appeal.