2017 (3) TMI 1301 - AT - Income Tax

Levy of fees under section 234E in intimation issued under section 200A(1) - default in furnishing the TDS statements - Held that - As decided in Maharashtra Cricket Association Vs. DCIT(CPC)-TDS, Ghaziabad 2016 (10) TMI 104 - ITAT PUNE the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law. - Decided in favour of assessee

Issues Involved:
1. Maintainability of the appeal under section 234E.
2. Applicability of fees under section 234E prior to the amendment effective from 01.06.2015.
3. Condonation of delay in filing the appeal.
4. Legislative intent and interpretation of section 200A and 234E of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeal under Section 234E:
The appellant contended that the order passed under section 234E is appealable under section 246A(1)(a) of the Income Tax Act, 1961. The Tribunal considered the legislative provisions and concluded that the appeal is maintainable, referencing the statutory framework that allows such appeals.

2. Applicability of Fees under Section 234E Prior to the Amendment Effective from 01.06.2015:
The core issue was whether the Assessing Officer (AO) could levy fees under section 234E for TDS statements filed before the amendment to section 200A(1)(c) effective from 01.06.2015. The Tribunal held that:

- Pre-amendment Scenario: Before the amendment, the AO did not have the authority to levy fees under section 234E while processing TDS statements.
- Post-amendment Scenario: The amendment effective from 01.06.2015 empowered the AO to levy such fees, but this power could not be applied retrospectively.

The Tribunal referred to various judicial precedents, including the decision of the Amritsar Bench in Sibia Healthcare (P) Ltd. Vs. DCIT and the Karnataka High Court in Sri Fatheraj Singhvi & Ors Vs. Union of India & Ors, which supported the view that the amendment is prospective.

3. Condonation of Delay in Filing the Appeal:
The appeal was filed with a delay of 10 days due to the illness and hospitalization of the brother of the Accountant. The Tribunal found the explanation reasonable and condoned the delay, allowing the appeal to proceed.

4. Legislative Intent and Interpretation of Section 200A and 234E:
The Tribunal delved into the legislative intent behind sections 200A and 234E, noting:

- Section 200A: Initially inserted by the Finance (No.2) Act, 2009 for processing TDS statements.
- Section 234E: Introduced by the Finance Act, 2012, imposing fees for late filing of TDS statements.
- Amendment by Finance Act, 2015: Empowered the AO to levy fees under section 234E while processing TDS statements, effective from 01.06.2015.

The Tribunal emphasized that the power to levy fees under section 234E through section 200A(1)(c) was granted prospectively from 01.06.2015. Thus, any intimation issued under section 200A prior to this date could not include fees under section 234E.

Conclusion:
The Tribunal concluded that the AO was not empowered to levy fees under section 234E for TDS statements filed before 01.06.2015. Consequently, the demand raised by charging fees under section 234E was invalid and was deleted. The appeal was allowed in favor of the assessee.

Order:
The appeal filed by the assessee was allowed, and the demand raised by the AO under section 234E was deleted. The decision was pronounced on 17th March 2017.

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