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2017 (3) TMI 816 - 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. Charging of late fees under Section 234E of the Income Tax Act, 1961 for delay in filing quarterly TDS statements. 2. Jurisdiction of the Assessing Officer to levy fees under Section 234E prior to the amendment effective from 1.6.2015. 3. Appealability of the intimation issued under Section 200A of the Act. Detailed Analysis: 1. Charging of Late Fees Under Section 234E: The primary issue in these appeals was the charging of late fees under Section 234E of the Income Tax Act, 1961, for the delay in filing quarterly TDS statements. The assessee filed its quarterly TDS statement for the 4th quarter of the financial year 2012-13 on 20.7.2013, which was due on 15.5.2013, resulting in a delay of 66 days. The Assessing Officer processed the return and levied a late fee of ?13,200 under Section 234E for this delay. 2. Jurisdiction of the Assessing Officer: The core contention was whether the Assessing Officer had the jurisdiction to levy fees under Section 234E in an intimation issued under Section 200A prior to the amendment effective from 1.6.2015. The assessee argued that Section 200A did not contain any reference to Section 234E until the amendment, thus the levy was beyond the scope of the then-existing provisions. The Tribunal in the case of Sibia Healthcare Private Ltd. vs. Dy. Commissioner of Income-tax (TDS) supported this view, stating that no such levy could be made prior to 1.6.2015. The Tribunal's decision aligned with the Amritsar Bench in Sibia Healthcare Pvt. Ltd. vs. DCIT, which held that the absence of an enabling provision under Section 200A before 1.6.2015 rendered any levy of fees under Section 234E invalid during that period. This interpretation was further supported by the Chennai Bench in Smt. G. Indhirani & Others vs. DCIT, which concluded that while the Assessing Officer could levy fees under Section 234E through a separate order, it could not be adjusted while processing TDS statements under Section 200A before 1.6.2015. 3. Appealability of the Intimation Issued Under Section 200A: The Tribunal also addressed whether the intimation issued under Section 200A was appealable. It was established that such intimations were indeed appealable before the CIT(A) under Section 246A(a) of the Act, effective from 1.7.2012. The Tribunal noted that the CIT(A) had erred in dismissing the appeal on the grounds of non-appealability and upheld that the CIT(A) could examine the validity of adjustments made under Section 200A. The Tribunal referenced the Pune Bench's decision in Gajanan Constructions & Ors. and the Karnataka High Court's ruling in Sri Fatheraj Singhvi & Ors vs. Union of India, which quashed intimations issued under Section 200A for levying fees under Section 234E for periods before 1.6.2015. These precedents reinforced the Tribunal's stance that the Assessing Officer did not have the authority to levy such fees in the absence of an enabling provision. Conclusion: The Tribunal concluded that the levy of late fees under Section 234E in the intimation issued under Section 200A dated 23.12.2013 was beyond the scope of the then-existing provisions. The order of the CIT(A) was set aside, and the late fee of ?13,200 was deleted. The decision applied mutatis mutandis to the other appeals with similar facts and circumstances, resulting in all the appeals being allowed.
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