2018 (9) TMI 1092 - AT - Income Tax

Levy of late filing fees u/s 234E - intimation issued under section 200A in respect of processing of TDS - Held that - We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT 2015 (6) TMI 437 - ITAT AMRITSAR adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. The impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.

Summary

Issues:
Challenge to correctness of late filing fees under section 234E without show cause notice.

Analysis:
The appellant challenged the correctness of the order passed by CIT(A)-8 regarding the levy of late filing fees under section 234E for the assessment year 2015-16. The appellant contended that the late fee under section 234E is penal in nature and cannot be imposed without issuing a show cause notice. The Tribunal considered the applicable legal position and noted that the period of delay in question was prior to the relevant amendment in section 200A. Referring to a Division Bench decision of ITAT Amritsar Bench, the Tribunal observed that the issue was squarely covered in favor of the assessee. The Tribunal highlighted that prior to 1st June 2015, there was no provision enabling the levy of fees under section 234E in the course of processing under section 200A.

The Tribunal examined the provisions of section 234E, which imposes a fee for defaults in furnishing statements, and section 200A, which deals with the processing of tax deducted at source statements. It noted that post 1st June 2015, an amendment in section 200A allowed for the computation of fees in accordance with section 234E during the processing of TDS statements. However, prior to this amendment, no such provision existed. The Tribunal emphasized that the adjustment in respect of levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A before the relevant amendment.

The Tribunal held that the impugned levy of fees under section 234E was unsustainable in law as it was made without the enabling provision under section 200A. It emphasized that the intimation under section 200A could only be passed within a specified timeframe, and as the related TDS statement was filed earlier, the levy could not be effected after the prescribed deadline. The Tribunal upheld the grievance of the assessee and deleted the impugned levy of fee under section 234E. The decision was based on the legal interpretation of the relevant provisions and judicial precedents.

In conclusion, the Tribunal allowed the appeal of the assessee, deleting the impugned levy of late filing fees under section 234E. The decision was made after thorough consideration of the legal provisions, precedents, and the specific circumstances of the case.