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2020 (4) TMI 257 - AT - Income TaxLate fee u/s. 234E - intimation u/s. 200A - delay in filing the TDS statement - Fee for default in furnishing statements - CIT-A declared the return of TDS filed u/s. 200(3) as non est - HELD THAT - In the case of Manoj Kumar Jaiswal 2019 (5) TMI 528 - ITAT BANGALORE this Tribunal decided identical issue holding that the Act contains provision for declaring a return of income filed as invalid u/s.139(9) of the Act. There is no such provision for declaring a return of TDS as invalid. There is no power conferred, either under those provisions or under any other provisions of the Act, to declare the return of TDS filed u/s. 200(3) as non est. The Tribunal also held that in appeal against an order u/s.200A of the Act, the provision of law applicable, in so far as the powers of CIT(A) in an appeal u/s.200A of the Act, was clause (c) of section 251 and that clause empowers the CIT(A) to pass such orders in the appeal as he thinks fit. The Tribunal held that a reading of the aforesaid clause would show that the CIT(Appeals) in the cases to which the said clause applies, can pass such orders as he thinks fit, but that power is circumscribed by the words in the appeal . Therefore, the CIT(Appeals) cannot travel beyond the subject matter of the appeal, which was as to whether fee u/s. 234E of the Act can be levied or not; and not the question, whether the return of TDS filed by the assessee is non est in law. We allow the appeals of the Assessee by holding that the conclusion of the CIT(Appeals) holding that return of TDS filed by the assessee is non est in law is not valid in the eyes of law and the said direction is directed to be deleted and the order of the CIT(Appeals), to this extent, is held to be bad in law. - Decided in favour of assessee.
Issues Involved:
1. Validity of levy of fee under Section 234E of the Income-Tax Act, 1961. 2. Authority of the Assessing Officer (AO) to levy fee under Section 234E while processing TDS returns filed before 1.6.2015. 3. The power of the Commissioner of Income Tax (Appeals) [CIT(A)] to enhance the assessment and declare TDS returns as non est due to non-payment of fees under Section 234E. Issue-wise Detailed Analysis: 1. Validity of Levy of Fee under Section 234E: The assessee filed TDS statements for various quarters in Form No. 24Q/26Q for FY 2012-13 to 2014-15 (AY 2013-14 to 2015-16) with delays. Consequently, the AO levied a late fee under Section 234E, which mandates a fee of ?200 per day for delays in filing TDS statements. The assessee challenged this levy before the CIT(A), who ruled in favor of the assessee by citing the Karnataka High Court's decision in Fatehraj Singhvi v. UOI, which held that the amendment allowing the levy of fees under Section 234E through Section 200A was prospective from 1.6.2015. 2. Authority of AO to Levy Fee under Section 234E While Processing TDS Returns Filed Before 1.6.2015: The CIT(A) agreed with the assessee's contention that the AO could not levy fees under Section 234E for TDS returns filed before 1.6.2015, as the relevant provisions under Section 200A(1)(c), (d), and (f) came into effect only from that date. Therefore, any computation of fees for delayed filing of TDS returns for periods before 1.6.2015 was invalid. 3. Power of CIT(A) to Enhance Assessment and Declare TDS Returns as Non Est: The CIT(A), in exercising his powers of enhancement, proposed that the TDS statements filed by the assessee were non est (invalid) due to non-payment of fees under Section 234E. The assessee argued that there is no provision under Section 200(3) to declare TDS returns as invalid, unlike the provisions under Section 139(9) for income tax returns. The CIT(A) rejected this argument, stating that the provisions of Sections 139 and 200(3) are not comparable and maintained that TDS statements filed without paying the fee are invalid. The Tribunal, however, held that there is no provision in the Act to declare TDS returns as non est. It referenced its earlier decision in Manoj Kumar Jaiswal & others Vs. ACIT, which stated that the CIT(A) does not have the power to declare TDS returns as invalid in appeals against orders under Section 200A. The Tribunal emphasized that the CIT(A)'s powers are limited to the subject matter of the appeal, which, in this case, was the validity of the fee levy under Section 234E and not the validity of the TDS returns. Conclusion: The Tribunal concluded that the CIT(A) overstepped his jurisdiction by declaring the TDS returns as non est and that such a declaration is not supported by the Act. The Tribunal directed that the CIT(A)'s order declaring the TDS returns as invalid be deleted, thus allowing the appeals of the assessee. The Tribunal also upheld that the levy of fees under Section 234E for periods before 1.6.2015 was invalid, aligning with the Karnataka High Court's decision. Final Judgment: All the appeals by the assessee were allowed, and the CIT(A)'s order declaring the TDS returns as non est was held to be invalid. The Tribunal pronounced this judgment on January 22, 2020.
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