2020 (2) TMI 1032 - AT - Income Tax

Applicability of Section 234E r.w.s. 204 - late filing fees - TDS u/s 194IA - transfer of immovable property - Regulatory provision being found in section 200A for computation of fee - HELD THAT - Legal issue raised by the Assessee has been addressed by Hon ble Gujarat High Court in favour of the Revenue and against the assessee in the case of Rajesh Kourani vs. Union of India 2017 (7) TMI 458 - GUJARAT HIGH COURT . The Hon ble Gujarat High Court held that section 234E of the Act is a charging provision creating a charge for levying fee for certain defaults in filing statements and fee prescribed under s.234E could be levied even in the absence of a regulatory provision being found in section 200A for computation of fee. In the light of aforesaid decision of the Hon ble Gujarat High Court, we decline to interfere with the action of the Revenue authorities. - Decided against assessee. TDS u/s 194IA - Held that - the obligation under s.194IA of the Act is fastened on the transferee qua each transferor and where the consideration paid to any transferor is less than ₹ 50 Lakhs, the provisions of Section 194IA of the Act would not apply. In parity with the view already expressed on the issue, in the absence of any default under s.194IA of the Act, consequential late filing fees under s.234E to this extent is deleted. Decided partly in favor of assessee.

Summary

Issues:
1. Challenge to late filing fees under Section 234E r.w.s. 204 of the Income Tax Act.
2. Applicability of TDS under Section 194IA(1) for transfer of immovable property.

Issue 1: Challenge to late filing fees under Section 234E r.w.s. 204 of the Income Tax Act:

The appeal was filed against the order of the Commissioner of Income Tax (Appeals) concerning the imposition of late filing fees of ?4,39,245 for the financial year 2013-14. The Assessee contended that Section 200A of the Income Tax Act is a machinery provision and does not create any charge, thus questioning the levy of fees under Section 234E without a regulatory provision in Section 200A. However, the Hon'ble Gujarat High Court ruled in a similar case that Section 234E is a charging provision and can be levied independently of Section 200A. Based on this precedent, the tribunal declined to interfere with the Revenue's action, dismissing the main grounds of appeal.

Issue 2: Applicability of TDS under Section 194IA(1) for transfer of immovable property:

The Assessee raised an additional ground challenging the obligation to deduct TDS under Section 194IA(1) for property transfers below ?50 lakhs to each transferee. The argument was that TDS should be applicable per transferee and not based on the aggregate value of the property. The tribunal admitted this ground and considered the case law where it was held that Section 194IA applies to each transferor individually, and if the consideration paid to any transferor is below ?50 lakhs, the TDS provisions do not apply. In line with this interpretation, the tribunal directed the deletion of late filing fees amounting to ?1,35,000 out of the total imposed late fee of ?4,39,301. Therefore, the appeal was partly allowed based on this ground.

In conclusion, the tribunal addressed the challenges related to late filing fees under Section 234E and the applicability of TDS under Section 194IA(1) for property transfers. The judgment provided clarity on the legal interpretations and upheld the decisions based on relevant precedents and provisions of the Income Tax Act.