2017 (3) TMI 137 - AT - Income Tax

Levy of fees under section 234E in intimation issued under section 200A(1) - scope of amendment to section 200A(1) - Held that - Following the referred decision in the case of Gajanan Constructions and others 2016 (11) TMI 1247 - ITAT PUNE we hold that the amendment to section 200A(1) is prospective in nature and therefore the AO, while processing the TDS statements/returns in the present appeal for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Therefore the intimations issued by the AO under section 200A of the Act in this appeal are unsustainable and the demand raised by way of charging of the fees under section 234E of the Act not being valid is deleted. AO is not empowered to charge 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 and consequently allow the ground of appeal raised by the assessee.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Legality of charging late fees under Section 234E of the Income Tax Act, 1961.
3. Applicability of Section 200A(1)(c) of the Income Tax Act, 1961.
4. Whether the amendment to Section 200A is retrospective or prospective.
5. Maintainability of appeal against intimation issued under Section 200A.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appellant filed the appeal with a delay of 17 days. The Tribunal considered the explanation provided by the appellant and applied the principles laid down by the Hon'ble Apex Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Others (1987) (167 ITR 471) (SC), emphasizing that substantial justice should prevail over technical considerations. The Tribunal condoned the delay in the interest of equity and justice.

2. Legality of Charging Late Fees under Section 234E:
The appellant contested the late fees charged under Section 234E for defaults in furnishing TDS statements. The Tribunal examined the statutory provisions and noted that Section 234E, inserted by the Finance Act, 2012, levies fees for late filing of TDS statements. However, this provision did not empower the Assessing Officer (AO) to charge such fees while processing TDS statements under Section 200A before the amendment by the Finance Act, 2015.

3. Applicability of Section 200A(1)(c):
The Tribunal observed that the amendment to Section 200A(1) by the Finance Act, 2015, which inserted clause (c) enabling the AO to charge fees under Section 234E while processing TDS statements, came into effect from 01.06.2015. Prior to this amendment, the AO did not have the authority to levy such fees during the processing of TDS returns.

4. Retrospective vs. Prospective Amendment:
The Tribunal held that the amendment to Section 200A(1) is prospective, effective from 01.06.2015. It emphasized that the enabling provision to charge fees under Section 234E was not retrospective. The Tribunal relied on the principles laid down in CIT Vs. Vatika Township Pvt. Ltd. (supra), which state that unless a contrary intention appears, legislation is presumed not to have retrospective operation.

5. Maintainability of Appeal Against Intimation Issued Under Section 200A:
The Tribunal concluded that intimation issued under Section 200A is appealable under Section 246A of the Act. It noted that the CIT(A) should have examined the legality of the adjustments made under the intimation. The Tribunal reversed the CIT(A)'s finding that no appeal is provided against the intimation issued under Section 200A, holding that such intimation is subject to appeal.

Conclusion:
The Tribunal allowed the appeal, holding that the AO was not empowered to charge fees under Section 234E by way of intimation issued under Section 200A for defaults occurring before 01.06.2015. The demand raised by charging fees under Section 234E was deemed invalid and deleted. The Tribunal also affirmed that appeals against such intimations are maintainable.