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2018 (6) TMI 303 - AT - Income TaxLevy of fees u/s 234E - delay in filing TDS returns - intimation u/s 200A - Held that - e provisions of Section 234E for levy of fees on account of late filing of TDS returns was brought on the Statute vide Finance Act, 2012 w.e.f. 01.07.2012 and also that Section 200A, which deals with the processing of TDS returns, gave no mandate to make adjustments on account of levy of fees u/s 234E prior to 01.06.2015 and that the same was brought on the Statute only vide Finance Act, 2015 w.e.f. 01.06.2015. Respectfully following the decision of the Karnataka High Court in the case of Fatheraj Singhvi (2016 (9) TMI 964 - KARNATAKA HIGH COURT), we hold that the fees levied in all the present cases u/s 234E prior to 01.06.2015 in the intimations made u/s 200A was without authority of law and the same is, therefore, directed to be deleted. All the appeals of the assessee stand allowed.
Issues involved:
Appeal against levy of fees u/s 234E for late filing of TDS returns - Maintainability of appeal before CIT(A) - Interpretation of Section 200A and Section 234E - Retrospective nature of amendment to Section 200A - Divergent views of High Courts on the issue. Detailed Analysis: 1. Maintainability of Appeal before CIT(A): The appeals by the assessee were directed against the orders of the CIT(A) regarding the levy of fees u/s 234E for late filing of TDS returns. The CIT(A) dismissed the appeals stating that no appeal lay against the levy of fees u/s 234E, relying on judgments of the Hon'ble Bombay High Court and the Hon'ble Rajasthan High Court. However, the ITAT held that the appeals were maintainable as the fees were levied in intimations made u/s 200A, which are appealable before the CIT(A) as per Section 246A of the Act. The ITAT disagreed with the CIT(A) and emphasized that the appeals were maintainable. 2. Interpretation of Section 200A and Section 234E: The ITAT considered the provisions of Section 200A, which deals with the processing of TDS returns, and Section 234E, which pertains to the levy of fees for late filing of TDS returns. It was noted that prior to 01.06.2015, there was no mandate to make adjustments for fees u/s 234E while processing TDS returns u/s 200A. The ITAT referred to judgments where it was held that fees u/s 234E could not be charged by way of adjustment before the specified date. 3. Retrospective Nature of Amendment to Section 200A: The ITAT discussed the retrospective nature of the amendment made to Section 200A, which authorized the AO to make adjustments for fees u/s 234E while processing TDS returns from 01-06-2015. Divergent views were presented by the Hon'ble Gujarat High Court and the Hon'ble Karnataka High Court on whether the levy of fees u/s 234E before the specified date was lawful. The ITAT, following the decision of the Karnataka High Court, held that the fees levied prior to 01.06.2015 in the present cases were without authority of law and directed them to be deleted. 4. Divergent Views of High Courts: The ITAT addressed the conflicting decisions of the High Courts on the issue of levying fees u/s 234E before 01.06.2015. It highlighted the importance of adopting the construction of a statute that favors the assessee when two reasonable interpretations are possible. The ITAT concurred with the view favoring the assessee, as per the decision of the Karnataka High Court, and allowed the appeals of the assessees, directing the deletion of the fees levied u/s 234E. In conclusion, the ITAT allowed the appeals of the assessees, emphasizing the maintainability of the appeals before the CIT(A) and the invalidity of levying fees u/s 234E before 01.06.2015 as per the provisions of Section 200A and Section 234E.
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