2018 (5) TMI 1626 - AT - Income Tax

Imposition of late filing fee u/s 234E while processing the TDS returns - Held that - as per the view of the case SRI. FATHERAJ SINGHVI AND OTHERS VERSUS UNION OF INDIA AND OTHERS 2016 (9) TMI 964 - KARNATAKA HIGH COURT , we find that substitution made by clause (c) to (f) u/s 200A(1) can be read as having prospective effect and not having retrospective effect - thus the demand u/s 200A for computation and intimation for the payment of fee u/s 234E could not be made - the levy of the fee is cancelled - Decided in favor of assessee.

Summary

Issues involved:
1. Imposition of late filing fee under section 234E
2. Validity of charging late filing fee u/s 234E in the intimation dated 10.11.2013
3. Interpretation of section 200A for levy of late fee u/s 234E prior to 01.06.2015

Analysis:
1. The appellant contested the imposition of a late filing fee under section 234E for Assessment Year 2013-14, arguing that the fee was charged despite timely filing of TDS statement and tax deposit. The primary contention was the absence of provision under section 200A for late fee levy u/s 234E for the period before 01.06.2015, when the order was issued on 10.11.2013.
2. The key issue revolved around whether the late filing fee u/s 234E was correctly imposed in the intimation dated 10.11.2013 under section 200A of the IT Act. The absence of an enabling provision in section 200A before 01.06.2015 for demanding late fee u/s 234E was highlighted by the appellant. The appellant argued that for TDS statements filed before 01.06.2015, no late fee could be charged in the intimation issued under section 200A.
3. The decision-making process involved a comparison of two conflicting judgments: 'Rajesh Kaurani vs. UOI' and 'Shri Fatehraj Singhvi and Others vs. UOI'. The CIT(A) relied on 'Rajesh Kaurani' to uphold the late fee imposition, considering it a machinery provision for processing TDS statements. However, the Tribunal disagreed, citing 'Shri Fatehraj Singhvi and Others' which held that section 200A amendments were prospective, not retrospective, and late fee demands could not be made for periods before 01.06.2015. The Tribunal also emphasized following the favorable High Court decision for the assessee as per established legal principles.

In conclusion, the Tribunal, following the precedent set by 'Shri Fatehraj Singhvi and Others', 'Sibia Healthcare Pvt. Ltd. vs. DCIT (TDS)', and 'Shri Kaur Chand Jain vs. DCIT, CPC (TDS) Ghaziabad', accepted the appellant's grievance as justified. The order under appeal was reversed, and the late fee levy was canceled. The dismissal of the stay application as infructuous accompanied the allowance of the appeal.