2021 (12) TMI 451 - AT - Income Tax

Levy of fee u/s 234E for belatedly filing the quarterly TDS returns - HELD THAT - Returns on Form 24Q for Quarter 2 of fianancial year 2012-13 and Form 24Q and 26Q for Quarter 4 (financial year 2012-13), the date of filing of return was 15.01.2013, 30.06.2014 and 30.06.2014 respectively and the due date of processing the return as provided under proviso to section 200(A), i.e., one year from the end of the financial year in which the statement is filed, was 31.03.2014, 31.03.2016, and 31.03.2016. The date of passing of the order u/s 200(A) for the alleged three Quarters is 29.08.2016, 05.12.2016 and 04.12.2016. Since there is no dispute to the facts mentioned hereinabove, it is crystal clear that all these three orders passed on 29.08.2016, 05.12.2016 and 04.12.2016 are time barred by limitation. We therefore find merit in the submissions made by the Ld. Counsel for the assessee and hold that the levy of fee u/s 234E of the Act at ₹ 18,400/- 42,000/- and 6820/- challenged before us deserves to be deleted as the order passed u/s 200(A) levying such fees are time barred by limitation and deserves to be quashed. Thus the assessee s appeal allowed. Levy of fee u/s 234E of the Act prior to 1st June, 2015 - Orders u/s 200A of the Act as processed on 27th March, 2015 - HELD THAT - Only w.e.f. 1st June, 2015 that the Assessing Officer was enabled with the power to determine fee u/s 234E and levy the same in the return process u/s 200(A) of the Act. Since no such levy could be made in an order passed u/s 200(A) of the Act towards levy of fee u/s 234E of the Act prior to 1st June, 2015, we respectfully following the above stated decision held that no such fee could be levied in the case of assessee at ₹ 14,610/- and 62,600/- for the returns filed for from 26Q 4 to 24Q, for quarter 4 of financial year 2013-14, as the orders processed u/s 200(A) of the Act were passed prior to 1st June, 2015, i.e., 27.02.2015. Thus assessee succeeds and the fee levied u/s 234E stand deleted.

Summary

Issues:
Appeal against order of Ld. CIT(A) regarding levy of fee u/s 234E for delay in submission of quarterly TDS returns.

Detailed Analysis:
1. The assessee challenged the order of Ld. CIT(A) regarding the levy of fee u/s 234E for delayed quarterly TDS returns for Assessment Years 2013-14 & 2014-15. The assessee contended that the delay in filing the appeal was due to the negligence of an employee, Mr. Vipan Sharma, who was not well-versed with technical advancements in online return filing. The Tribunal noted that the delay was not intentional and that the assessee had a reasonable cause for the delay, as per the principles of substantial justice.

2. The Tribunal observed that the Income Tax Department frequently updates the system for filing TDS returns, and in this case, the delay in filing the appeal was primarily due to the employee's inefficiency and ignorance of the changing TDS system. Citing a Supreme Court judgment, the Tribunal emphasized the importance of considering sufficient cause liberally in such cases. Consequently, the Tribunal held that the delay should have been condoned by the Ld. CIT(A) in the interest of substantial justice.

3. Regarding the specific grounds raised in the appeals, the Tribunal found that the orders passed under section 200A for certain quarters were time-barred by limitation. The due date for processing the returns had lapsed before the orders were issued, rendering the imposition of fees u/s 234E invalid. Therefore, the Tribunal allowed the appeals for those quarters and directed the deletion of the fees imposed.

4. Furthermore, the Tribunal highlighted an amendment in the Finance Act effective from 1st June 2015, empowering Assessing Officers to levy fees u/s 234E during return processing under section 200A. The Tribunal referred to previous decisions and held that fees could not be levied for returns processed before this amendment. Consequently, the Tribunal allowed the appeals for certain quarters in 2014-15 and directed the deletion of fees imposed u/s 234E.

5. In conclusion, the Tribunal allowed the appeals of the assessee, setting aside the orders of the Ld. CIT(A) regarding the levy of fees u/s 234E for delayed quarterly TDS returns, based on the grounds of condonation of delay and the applicability of fees as per the relevant amendments.

This detailed analysis covers the issues raised in the appeals and the Tribunal's findings on each ground, providing a comprehensive understanding of the judgment.