2016 (10) TMI 104 - AT - Income Tax

Levy of fees under section 234E in intimation issued under section 200A(1) - Late filing of TDS return - whether any appeal is maintainable against the intimation issued under section 200A of the Act and / or order passed under section 154 r.w.s. 200A of the Act by AO in charging the fees under section 234E of the Act? - Held that - The Legislature recognizes that a deductor who has filed his statement of tax deducted at source which in turn has been processed by the Assessing Officer and intimation is generated under which if any amount is found to be payable then such intimation generated after processing of TDS returns is subject to rectification under section 154 of the Act and / or is also appealable under section 246A of the Act since the demand issued by the Assessing Officer is deemed to be a notice of payment under section 156 of the Act. Since the intimation in question issued by the Assessing Officer was appealable order under section 246A(1)(a) of the Act therefore the CIT(A) should have examined the legality of adjustment made under intimation issued under section 200A of the Act. The CIT(A) has rejected the present set of appeals on the surmise that first of all no appeal is provided against the intimation issued under section 200A of the Act. Further the CIT(A) has also decided the issue on merits and the assessee is in appeal before us on both these grounds. Vis- -vis the first issue of maintainability of appeal against the intimation issued under section 200A of the Act we hold that such intimation issued by the Assessing Officer after processing the TDS returns is appealable. The demand raised by way of charging of fees under section 234E of the Act is under section 156 of the Act and any demand raised under section 156 of the Act is appealable under section 246A(1)(a) and (c) of the Act. Accordingly we reverse the findings of CIT(A) in this regard. Once intimation issued under section 200A(1) of the Act is appealable order before the CIT(A) under section 246A(1)(a) of the Act then such appealable order passed by the CIT(A) under section 250 of the Act is further appealable before the Tribunal under section 253 of the Act. Hence we admit the present appeals filed by the assessee even on this preliminary issue. We have already adjudicated the issue of charging fees under section 234E of the Act by the Assessing Officer while processing returns / statements in the paras hereinabove and in view thereof we hold that the Assessing Officer is not empowered to charge the fees under section 234E of the Act by way of intimation issued under section 200A of the Act in respect of defaults before 01.06.2015 we allow the claim of assessee on both the aspects. The grounds of appeal raised by the assessee are thus allowed.

Summary

Issues Involved:
1. Maintainability of appeals against orders passed under section 200A(3) of the Income-tax Act, 1961.
2. Charging of fees under section 234E of the Act prior to the amendment to section 200A(1)(c) of the Act w.e.f. 01.06.2015.

Detailed Analysis:

1. Maintainability of Appeals:

The core issue is whether appeals filed by the assessee against the orders passed under section 200A of the Income-tax Act, 1961, are maintainable. The CIT(A) held that such orders were not appealable under section 246A(1) of the Act. However, the Tribunal pointed out that the intimation generated after processing TDS statements is appealable under section 246A of the Act. The Memorandum explaining the Finance Bill, 2015, recognized that an intimation generated after processing TDS statements is subject to rectification under section 154 of the Act and is appealable under section 246A of the Act. Therefore, the Tribunal concluded that the intimation issued by the Assessing Officer after processing the TDS returns is indeed appealable. The Tribunal reversed the findings of the CIT(A) and held that such intimation is an appealable order under section 246A(1)(a) of the Act.

2. Charging of Fees Under Section 234E:

The second issue pertains to whether fees under section 234E of the Act could be charged prior to the amendment to section 200A(1)(c) of the Act by the Finance Act, 2015, w.e.f. 01.06.2015. The Tribunal noted that the power to charge fees under section 234E of the Act while processing TDS returns was vested in the prescribed authority only after the amendment. Before this amendment, the Assessing Officer did not have the authority to charge fees under section 234E while issuing intimation under section 200A of the Act. The Tribunal emphasized that any provision of the Act made applicable from a specific date must be applied from that date and not retrospectively. The Tribunal held that the amendment to section 200A(1) of the Act is procedural in nature and applies prospectively from 01.06.2015. Consequently, the Assessing Officer was not empowered to charge fees under section 234E of the Act for TDS statements filed before 01.06.2015.

The Tribunal relied on various decisions, including those of the Amritsar Bench in Sibia Healthcare (P) Ltd. v. DCIT and the recent judgment of the Karnataka High Court in Sri Fatheraj Singhvi & Ors v. Union of India & Ors, which quashed the intimation issued under section 200A of the Act for levying fees under section 234E of the Act for periods prior to 01.06.2015. The Tribunal also referred to the decision of the Hon'ble Supreme Court in CIT v. Vatika Township Pvt. Ltd., which held that legislation is presumed not to have retrospective operation unless a contrary intention appears.

In conclusion, the Tribunal allowed the appeals filed by the assessee, holding that the Assessing Officer was not empowered to charge fees under section 234E of the Act while processing TDS returns for periods prior to 01.06.2015, and that such intimation issued under section 200A is appealable.

Order:

The Tribunal allowed the appeals filed by different assessee for different quarters relating to different years, except for a few appeals which were dismissed as withdrawn.