2020 (9) TMI 289 - AT - Income Tax

Late filing fee u/s. 234E - Late filing of TDS returns / statement - contention that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - conflicting decisions by different High Courts - HELD THAT - Levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200A for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited 1973 (1) TMI 1 - SUPREME COURT . We hold that the CIT(A) is not justified in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015 - Fee levied u/s. 234 E is directed to be deleted. - Decided in favour of assessee.

Summary

Issues Involved:
1. Levy of late filing fee under section 234E of the Income Tax Act.
2. Validity of the late filing fee imposed prior to the amendment in section 200A(1) effective from 01.06.2015.
3. Delay in filing appeals and the condonation of such delay.

Detailed Analysis:

1. Levy of Late Filing Fee under Section 234E:
The core issue in these appeals is the levy of late filing fees under section 234E by the Assessing Officer (AO), which was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The Department Representative (DR) argued that section 234E, introduced by the Finance Act, 2012, mandates a fee for delayed filing of TDS statements. The DR emphasized that section 200A, amended by the Finance Act, 2015, merely provides a mechanism for computing this fee at the time of processing TDS statements and does not affect the chargeability of the fee itself. The DR cited various High Court decisions upholding the validity of section 234E and argued that the fee is compensatory rather than penal.

2. Validity of Late Filing Fee Imposed Prior to Amendment in Section 200A(1):
The Tribunal had to consider whether the AO was justified in levying late fees under section 234E for periods before the amendment to section 200A(1) on 01.06.2015. The DR argued that section 234E is a charging provision effective from 01.07.2012, and the amendment to section 200A(1) was merely procedural, enabling the computation of fees during processing. The DR cited several High Court judgments, including those from Gujarat and Rajasthan, which upheld the levy of fees for periods before the amendment. The Tribunal, however, referred to the Karnataka High Court's decision in Fatehraj Singhvi vs. UOI, which held that the amendment to section 200A(1) is prospective and fees under section 234E cannot be levied for periods before 01.06.2015.

3. Delay in Filing Appeals and Condonation:
The CIT(A) dismissed the appeals on the grounds of delay in filing, noting that the assessees did not provide any justification for the delay. However, the Tribunal found that the appeals were filed within the time frame if calculated from the date of the rectification order under section 154, rather than the original order under section 200A. The Tribunal considered this a technical error and held that there was no delay in filing the appeals, thus allowing the appeals to be considered on merit.

Conclusion:
The Tribunal concluded that the AO was not empowered to levy late fees under section 234E for periods prior to 01.06.2015, based on the Karnataka High Court's ruling in Fatehraj Singhvi vs. UOI. The Tribunal also found that there was no delay in filing the appeals and directed the deletion of the fees and interest levied under sections 234E and 220(2). Consequently, all the appeals were allowed in favor of the assessees.