2018 (2) TMI 96 - AT - Income Tax

Levy of late filing fee u/s 234E - scope of adjustment provided u/s 200A - Held that - The amendment in section 200A (1) of the Act is procedural in nature and AO while processing the TDS statements, returns of the period prior to 01/06/2015 was not empowered to charge late fee under section 234E of the Act, as such the intimation issued by the assessing officer under section 200A of the Act does not stand and the demand raised by way of charging fee under section 234E of the Act is not valid and, accordingly, is liable to be deleted. See Gajanan Constructions vs DCIT 2016 (10) TMI 92 - ITAT PUNE - Decided in favour of assessee.

Summary

Issues:
1. Levy of late filing fee under section 234E of the IT Act.
2. Power of the officer to charge/collect fee under section 234E prior to the substitution of clause (c) to section 200A of the Act by the Finance Act, 2015.

Analysis:

Issue 1: Levy of late filing fee under section 234E of the IT Act:
The case involved a challenge to the order confirming the levy of a late filing fee of ?39,400 under section 234E of the IT Act. The assessee, an individual, had deducted TDS and filed the return after the due date. The TDS return was initially accepted without any late filing fee but was later charged by the DCIT Centralised Processing Cell-TDS. The Tribunal considered the provisions of section 200A and section 234E of the Act. It was noted that prior to 01/06/2015, there was no enabling provision in section 200A for raising a demand for the levy of fee under section 234E. The Tribunal relied on previous decisions and held that the amendment in section 200A(1) is procedural, and the assessing officer was not empowered to charge late fees under section 234E for returns prior to 01/06/2015. Consequently, the demand for late filing fee was deemed invalid and was ordered to be deleted.

Issue 2: Power of the officer to charge/collect fee under section 234E prior to the substitution of clause (c) to section 200A of the Act by the Finance Act, 2015:
The Tribunal compared decisions from different High Courts and the Supreme Court regarding the applicability of section 234E of the Act by the Assessing Officer while processing TDS statements. It was observed that the amendment in section 200A(1) of the Act is procedural, and the assessing officer lacked the authority to charge fees under section 234E for periods before 01/06/2015. The Tribunal emphasized that when two views are possible, the one favoring the assessee should be followed. Therefore, the demand raised for late filing fee under section 234E was deemed invalid and ordered to be deleted based on the precedent set by previous decisions.

In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that the amendment in section 200A(1) is procedural, and the assessing officer was not empowered to charge late filing fees under section 234E for returns filed before 01/06/2015. The demand for late filing fee was declared invalid and was directed to be deleted.