2021 (9) TMI 1100 - AT - Income Tax

Levy of late filing fee u/s 234E - intimation u/s 200A - Jurisdiction of AO - Assessee argued as AO had not power to make an adjustment while processing the TDS return u/s 200A of the Act prior to amendment in the statute w.e.f. 01.06.2015 enabling the Assessing Officer to make such adjustment - HELD THAT - In the case, in hand, since the delay is continuous and beyond to the amendment w.e.f. 01.06.2015 and therefore, once the provisions of section 234E r.w.s 200A of the Act are applicable w.e.f. 01.06.2015, the delay from that date onwards will attract the levy of late filing fee. Undisputedly, the default in submitting the TDS return in Form No.26Q continued even after the amendment w.e.f. 01.06.2015 and therefore, the delay from the period 01.06.2015 till filing of fee TDS return on 27.06.2015 will attract the levy of late filing fee u/s 234E while processing TDS return u/s 200A. Decisions relied by the Ld. AR of the assessee are on the point that the TDS return processed u/s 200A prior to 01.06.2015 would not attract the provisions of section 234E of the Act as the Assessing Officer was not having any power to make such adjustment prior to the amendment w.e.f. 01.06.2015. Accordingly, we modify the impugned orders of the Assessing Officer as well as of the Ld. CIT(A) and direct the Assessing Officer to compute the late filing fee u/s 234E of the Act for a delay w.e.f. 01.06.2015 till the filing of the TDS return. Appeal of the assessee is partly allowed.

Summary

Issues:
Late filing fee under section 234E of the Income Tax Act, 1961 while processing TDS return u/s 200A for the Assessment Year 2015-16.

Detailed Analysis:

1. Issue 1 - Lack of Opportunity and Natural Justice:
The assessee contended that no opportunity of being heard or show cause notice was provided before the penalty notice under section 234E was issued, violating natural justice principles. The appellant argued that the quantum of late fees was disproportionate and confiscatory, despite timely tax payments. The appellant's advocate's oversight in filing the return led to the delay, but it was emphasized that no tax avoidance or financial loss occurred due to the late filing.

2. Issue 2 - Legal Amendments and Jurisdiction:
The crux of the matter revolved around the amendment in section 200A of the Act, effective from 01.06.2015, empowering the Assessing Officer to levy fees under section 234E while processing TDS returns. The appellant argued that prior to this amendment, the Assessing Officer lacked the authority to impose such fees. The appellant cited judicial precedents and decisions to support the contention that the late filing fee under section 234E was unjustified and should be deleted.

3. Issue 3 - High Court Interpretation and Prospective Effect:
The High Court's interpretation of the amendment in section 200A, holding it as prospective, played a crucial role in the judgment. The court clarified that no fee computation for the period before 01.06.2015 could be made under section 200A. The delay in filing the TDS return before the amendment date was not subject to section 234E provisions. However, any delay post-amendment attracted the late filing fee, as seen in the continuous default in submitting the TDS return.

4. Judgment:
The Tribunal, considering the retrospective effect of the amendment and the jurisdictional aspects, partially allowed the appeal. It modified the orders of the Assessing Officer and the CIT(A), directing the computation of late filing fee under section 234E from 01.06.2015 till the actual filing of the TDS return. The decision highlighted the importance of legal amendments, jurisdictional powers, and prospective application of statutory provisions in determining the levy of penalties and fees under the Income Tax Act.

This comprehensive analysis of the legal judgment showcases the intricate legal arguments, statutory provisions, and judicial interpretations that influenced the final decision regarding the late filing fee under section 234E of the Income Tax Act, 1961.