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2021 (11) TMI 676 - AT - Income TaxLevying late fees u/s. 234E - belated submission of TDS statements - Scope of amendment - HELD THAT - It is only w.e.f. 01.06.2015 an amendment was made u/s. 200A of the Act providing that fee u/s. 234E could be computed at the time of processing of the return of income and intimation could be issued specifying the same payable by the deductor as fee u/s. 234E of the Act. The Hon ble Karnataka High Court in the case of Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT held that the provisions of section 234E of the Act are substantive in nature and the mechanism for computing the late fee was provided by the Parliament only w.e.f. 01.06.2015. Therefore late fees u/s. 234E of the Act can be levied only prospectively w.e.f. 01.06.2015. We delete the levy of penalty u/s. 234E - Decided in favour of assessee.
Issues:
Appeal against orders of CIT(A) for assessment years 2013-14 and 2014-15 regarding levy of late fees u/s. 234E of the Income Tax Act, 1961. Analysis: The appeals challenged the orders of the CIT(A) related to the levy of late fees u/s. 234E of the Income Tax Act for belated submission of TDS statements. The appellant, a company, had submitted the statements late during the financial year 2012-13. The CIT(A) dismissed the appeal relying on a decision of the Bombay High Court. The issue centered on the retrospective application of the late fee provision u/s. 234E. The Karnataka High Court's judgment in Fatheraj Singhvi vs. Union of India was cited, emphasizing that the late fee provisions were substantive and could only be levied prospectively from 01.06.2015. The tribunal noted that the Bombay High Court had upheld the constitutional validity of section 234E but had not addressed its retrospective operation. Consequently, the tribunal directed the ACIT to delete the penalty levied under section 234E. The tribunal's decision was based on the principle that statutory provisions should be read with prospective effect unless expressly provided otherwise. The tribunal highlighted that the late fee under section 234E could not be computed for the period before 01.06.2015. The tribunal referred to previous cases where the late fee provisions were held to be prospective. It was clarified that the judgment would not allow reopening of fees already paid for the period before 01.04.2015. The tribunal emphasized that the question of the constitutional validity of section 234E remained open for consideration by a Division Bench and was not concluded by the current order. In conclusion, the tribunal allowed the appeals of the assessee for both assessment years 2013-14 and 2014-15, directing the deletion of the penalty levied under section 234E. The decision was made on the basis of the retrospective application of the late fee provision and the principle of prospective effect in interpreting statutory provisions. The tribunal's judgment clarified the limited scope for refund claims on fees paid and kept open the question of the constitutional validity of section 234E for further consideration.
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