2020 (7) TMI 503 - AT - Income Tax

Late filing of fees u/s.234E - intimation u/s.200A - HELD THAT - On perusal and analyzing the details , it is absolutely clear that prior to 1.6.2015, there was no enabling provision in section 200A of the Act for raising a demand in respect of levying fee u/s.234E. Therefore, we hold that the intimation u/s.200A of the Act as confirmed by the Ld. CIT so far as levying of fees u/s.234E of the Act is, therefore, set aside and the fees levied is deleted. See CHHATTISGARH RAJYA GRAMIN BANK VERSUS INCOME TAX OFFICER 2019 (1) TMI 1791 - ITAT RAIPUR - Ground raised by the assessee is allowed.

Summary

Issues Involved:
1. Levy of fee under Section 234E of the Income Tax Act, 1961 for periods prior to 01/06/2015.
2. Validity of intimation under Section 200A of the Income Tax Act, 1961 for levying fees under Section 234E.

Detailed Analysis of the Judgment:

Issue 1: Levy of Fee under Section 234E for Periods Prior to 01/06/2015
The primary issue in these appeals was whether the Income Tax Authorities erred in law and on facts in levying fees under Section 234E of the Income Tax Act, 1961 (the Act) through an intimation under Section 200A for periods prior to 01/06/2015. The assessee argued that the levy of fees under Section 234E was not permissible as an adjustment under Section 200A for the period before 01/06/2015.

The Tribunal referenced a series of precedents, including decisions from the Raipur Bench in Chhattisgarh Rajya Gramin Bank & Ors. vs. The Income Tax Officer, TDS, Bilaspur (CG), and the Asr Bench in Sibia Healthcare Private Limited vs. DCIT. These decisions consistently held that prior to 01/06/2015, Section 200A did not provide for the levy of fees under Section 234E. The Tribunal cited the Finance Act 2015, which amended Section 200A effective from 01/06/2015 to include the levy of fees under Section 234E as part of the permissible adjustments during the processing of TDS statements.

The Tribunal concluded that for the periods before 01/06/2015, the levy of fees under Section 234E through an intimation under Section 200A was beyond the scope of permissible adjustments. Consequently, the fees levied for the delay in filing the TDS returns for the assessment years in question were deemed unsustainable in law.

Issue 2: Validity of Intimation under Section 200A for Levying Fees under Section 234E
The Tribunal examined whether the intimation issued under Section 200A for levying fees under Section 234E was valid. It was noted that the intimation under Section 200A could only include adjustments for arithmetical errors and incorrect claims apparent from any information in the statement, as per the law before 01/06/2015.

The Tribunal referenced several judicial precedents, including the decision of the Jodhpur Bench in Government Secondary School vs. ACIT, which held that the Assessing Officer exceeded his jurisdiction by levying fees under Section 234E while processing the statement under Section 200A for periods prior to 01/06/2015. The Tribunal reiterated that no other provision enabling a demand in respect of this levy was pointed out, and thus, the levy was unsustainable.

The Tribunal concluded that the intimation under Section 200A could not include the levy of fees under Section 234E for periods before 01/06/2015. Therefore, the demands raised through such intimations were quashed.

Conclusion:
The Tribunal allowed the appeals of the assessee, setting aside the orders of the CIT(Appeal) and deleting the fees levied under Section 234E for the periods prior to 01/06/2015. The remaining grounds of appeal were deemed academic and required no adjudication.

In summary, the Tribunal held that the levy of fees under Section 234E through an intimation under Section 200A for periods prior to 01/06/2015 was not permissible, and such levies were unsustainable in law. The appeals were allowed in favor of the assessee.