2019 (1) TMI 390 - AT - Income Tax

Levy of late filing fees under section 234E - assessee received an intimation under section 200A - assessee was running primary school at Nanded - default in furnishing of TDS returns because of wrong mention of TAN numbers - correction in TAN was not reflected on OLTAS - For carrying out necessary correction on OLTAS, the assessee school first approached the ITO, TDS, Nanded. But the jurisdiction of assessee school lies with ITO, TDS, Nashik, therefore the ITO, TDS, Nanded was not authorized to do necessary correction - how the assessee could make application to ITO (TDS), Nanded, whereas its jurisdiction was with ITO (TDS), Nashik? Held that - We have already decided similar issue in the bunch of cases with lead order in the case of Medical Superintendent Rural Hospital Vs. DCIT, CPC (TDS), Ghaziabad 2018 (10) TMI 1587 - ITAT PUNE and held that the AO had no jurisdiction to pass consequent order while processing TDS returns for the period prior to 01.06.2015, since the amendment was brought into effective from 01.06.2015 empowering the Assessing Officer to charge late filing fees under section 234E of the Act. - Decided in favour of assessee.

Summary

Issues Involved:
1. Levy of late filing fees under section 234E of the Income-tax Act, 1961.
2. Jurisdiction of the Assessing Officer to charge late fees under section 234E for periods prior to the amendment effective from 01.06.2015.
3. Reasonable cause for delay in filing TDS returns due to technical issues.

Issue-wise Detailed Analysis:

1. Levy of Late Filing Fees under Section 234E:
The primary issue in the appeals was the levy of late filing fees under section 234E of the Income-tax Act, 1961. The assessee, a primary school, had deducted TDS on salaries but faced delays in filing TDS returns due to a mismatch in TAN numbers. The CIT(A) upheld the levy of late fees, citing the mandatory nature of section 234E and referencing the Hon'ble High Court of Kerala's decision in Shree Narayana Guru Smaraka Sangam Upper Primary School Vs. Union of India/DCIT, CPC, Ghaziabad.

2. Jurisdiction of the Assessing Officer:
The second critical issue was whether the Assessing Officer had the jurisdiction to charge late fees under section 234E for periods prior to the amendment effective from 01.06.2015. The Tribunal referred to its previous decisions, notably in Medical Superintendent Rural Hospital Vs. DCIT, CPC (TDS), Ghaziabad, and held that the Assessing Officer did not have the jurisdiction to levy such fees for periods before the amendment. The Tribunal reiterated that the amendment to section 200A(1) was prospective and not retroactive, as supported by the Hon'ble High Court of Karnataka in Fatheraj Singhvi Vs. Union of India.

3. Reasonable Cause for Delay:
The assessee argued that the delay in filing TDS returns was due to technical issues with the Online Tax Accounting System (OLTAS) and the correction of TAN numbers. The Tribunal noted that the assessee had made efforts to rectify the TAN issue, which was eventually corrected by the ITO, TDS, Nashik. However, the Tribunal did not delve deeply into the reasonable cause argument, focusing instead on the jurisdictional issue.

Conclusion:
The Tribunal concluded that the Assessing Officer had no jurisdiction to levy late filing fees under section 234E for periods prior to the amendment effective from 01.06.2015. Consequently, the late filing fees levied for the assessment years 2013-14 and 2014-15 were quashed, and the appeals of the assessee were allowed. The Stay Applications filed by the assessee were dismissed as a result.

Order Pronouncement:
The order was pronounced on the 2nd day of November, 2018, allowing the appeals of the assessee and dismissing the Stay Applications.