2020 (2) TMI 926 - AT - Income Tax

Late fee levied u/s 234E for belated filing of TDS statements - HELD THAT - Although, the provision of section 234E of the Act, providing for levy of fee, in case of delayed filing of statement of TDS was there in the statute book w.e.f. 01/07/2002, but, since no corresponding amendment was made to provision of section 200A of the I.T.Act, 1961, before insertion of sub-clause (c) to section 200A by the finance Act, 2015 w.e.f. 01/06/2015, the late fee prescribed u/s 234E cannot be levied, while processing TDS statements filed and processed before 01/06/2015. In this case, on perusal of facts, we find that the Ld. AO has levied late fee u/s 234E, in respect of TDS statements filed in form 24Q for the quarter ending 15/10/2002 and 30/03/2013, which is prior to 01/06/2015. Therefore, we are of the considered view that the Ld. AO has erred in levying late fee u/s 234E of the Act, The Ld.CIT(A) without appreciating the facts has simply affirmed the findings of the Ld. AO. Hence, we direct the Ld. AO to delete late fee levied u/s 234E of the Act, for belated filing of TDS statements. - Decided in favour of assessee.

Summary

Issues:
- Levy of late fees u/s 234E of the Income Tax Act, 1961 for belated filing of TDS returns.
- Applicability of late filing fee u/s 234E for TDS returns filed prior to 01/06/2015.

Analysis:
1. The case involved appeals against the Commissioner of Income tax (Appeals)'s order for the AY 2013-14 regarding the levy of late fees u/s 234E of the Income Tax Act, 1961 for belated filing of TDS returns. The appeals were heard together due to identical facts and common issues.

2. The assessee challenged the levy of late filing fee u/s 234E, arguing that the amendment to section 200A, effective from 01/06/2015, did not apply to TDS returns filed before that date. The assessee cited relevant case laws but the CIT(A) upheld the levy, stating that the statutory levy is mandatory when a late filing default occurs, even if an automated system accepts the returns.

3. During the hearing, the assessee relied on the decision of the Karnataka High Court and an ITAT Mumbai case to support their argument that the amendment to section 200A should apply prospectively from 01/06/2015. The Revenue, however, supported the CIT(A)'s decision based on a similar ruling by the Gujarat High Court.

4. The Tribunal noted conflicting decisions by different High Courts and ITATs on the issue. It referenced various cases, including decisions favoring both the assessee and the revenue. Ultimately, the Tribunal concluded that the late fee u/s 234E cannot be levied for TDS returns filed before 01/06/2015, as the amendment to section 200A did not authorize such levy before that date.

5. Consequently, the Tribunal directed the Assessing Officer to delete the late fee levied u/s 234E for the belated filing of TDS statements in form 24Q for the relevant quarters ending before 01/06/2015. The appeals filed by the assessee were allowed, overturning the decisions of the lower authorities.

6. The judgment was pronounced on 22/01/2020 by the Appellate Tribunal ITAT Mumbai, with detailed analysis and references to legal precedents supporting the decision to delete the late fees levied u/s 234E for TDS returns filed prior to 01/06/2015.