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2017 (3) TMI 815 - AT - Income TaxFees u/s 234E in respect of defaults in furnishing of TDS statements levied in the intimation under section 200A for the period prior to 01.06.2015 while processing TDS returns - Held that - Following the decision in the case of Kash Realtors Pvt. Ltd. & Others 2016 (8) TMI 63 - ITAT MUMBAI we hold that the amendment to section 200A(1) of the Act is prospective in nature and therefore the Assessing Officer (AO), while processing the TDS statements/returns in the case on hand for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Therefore, the intimation issued by the AO under section 200A of the Act in this appeal is unsustainable and the demand raised by way of charging of fees under section 234E of the Act not being valid, is deleted. In this view of the matter, we hold that the AO is not empowered to charge fees under section 234E of the Act by way of intimation under section 200A of the Act in respect of defaults before 01.06.2015 and consequently set aside the orders of the learned CIT(A) and decide the issue in favour of the assessee.
Issues Involved:
1. Contradictory statements regarding attendance and submission by the appellant's representative. 2. Justification of penalty for delay in downloading CSI files after e-payment. 3. Applicability of fees under section 234E of the Income Tax Act, 1961 for defaults in furnishing TDS statements prior to 01.06.2015. Issue-wise Detailed Analysis: 1. Contradictory Statements Regarding Attendance and Submission: The appellant contended that the CIT(A) order was contradictory as it mentioned the presence of Shri Ravindran CA for the appellant but later stated that no one attended and no written submission was filed. This inconsistency was highlighted as a ground for appeal, questioning the procedural accuracy and fairness of the CIT(A) proceedings. 2. Justification of Penalty for Delay in Downloading CSI Files: The appellant argued that the delay in downloading CSI files after e-payment was beyond their control, rendering the penalty unjustified. This ground challenges the imposition of penalties under circumstances where the appellant had no direct influence over the delay, suggesting that penal measures should consider factors beyond the taxpayer's control. 3. Applicability of Fees Under Section 234E: The primary issue was whether fees under section 234E for defaults in furnishing TDS statements could be levied in the intimation under section 200A for periods before 01.06.2015. The Tribunal referenced the decision in the case of Kash Realtors Pvt. Ltd., which held that the amendment to section 200A(1) allowing for such adjustments was prospective and effective only from 01.06.2015. Therefore, for periods before this date, the AO was not empowered to levy fees under section 234E while processing TDS statements under section 200A. Analysis and Conclusion: - The Tribunal noted that the issue at hand was covered by the decision of the Coordinate Bench in the case of Kash Realtors Pvt. Ltd., which was consistent with other decisions like Sibia Healthcare Pvt. Ltd. and Springtime Clubs & Hospitality Services P. Ltd. - The Tribunal emphasized that the provision for making adjustments regarding fees under section 234E was introduced by the Finance Act, 2015, effective from 01.06.2015. Hence, any levy of such fees before this date was not legally valid. - The Tribunal also discussed the reliance on the Bombay High Court decision in Rashmikant Kundalia vs. Union of India, which upheld the constitutional validity of section 234E but did not address the specific issue of its applicability in processing TDS statements before 01.06.2015. - It was concluded that the AO exceeded jurisdiction by levying fees under section 234E while processing TDS statements for periods before 01.06.2015. The Tribunal set aside the orders of the lower authorities and deleted the fees levied under section 234E for the relevant period. Final Judgment: The appeal was allowed, with the Tribunal holding that the AO was not empowered to charge fees under section 234E by way of intimation under section 200A for defaults before 01.06.2015. The orders of the CIT(A) were set aside, and the demand raised by charging fees under section 234E was deleted. The appeal for A.Y. 2013-14 was thus resolved in favor of the assessee.
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