2021 (12) TMI 1075 - AT - Income Tax

Late filing fee u/s 234E - TDS returns filled in Form 26Q and Form 24Q for various quarters belatedly - HELD THAT - In the instant case out of 21 quarters for 8 quarters the CIT(A) held that the assessee has not brought out sufficient cause for delay. Admittedly for 8 quarters the issue is directly covered in favour of the assessee by the judgment of the Hon ble jurisdictional High Court in the case of Sri Fateharaj Singhvi v. Union of India Ors. 2016 (9) TMI 964 - KARNATAKA HIGH COURT - assessee has filed application for condonation of delay. However the CIT(A) without commented on above applications states that the assessee had not brought out sufficient reasons to condone the delay (for only 8 quarters out of 21 quarters). Therefore we hold that the CIT(A) has erred in dismissing the appeal pertaining to 8 quarters on the ground of delay in filing the appeal before him. The assessing Officer cannot make any adjustment other than one prescribed in section 200A of the Act. Prior to 01.06.2015 there was no enabling provision in section 200A of the Act for making adjustment in respect of statement filed by the assessee with regard to tax deducted at source by levying fees u/s 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fees u/s 234E of the Act with effect from 01.06.2015. The Hon ble jurisdictional High Court in the case of Sri Fateharaj Singhvi v. Union of India Ors. 2016 (9) TMI 964 - KARNATAKA HIGH COURT has held that adjustment cannot be made by the A.O. for the respective assessment year prior to 01.06.2015. Therefore for the relevant assessment years namely A.Ys 2013-2014 2014- 2015 and 2015-2016 the levy of tax u/s 234E of the Act is impressible going by the dictum laid down by the Hon ble jurisdictional High Court in the case of Sri Fateharaj Singhvi v. Union of India Ors. (supra). - Decided in favour of assessee.

Summary

Issues:
Appeal against CIT(A) order for late filing fees u/s 234E, Principles of natural justice, Equitable order, Delay condonation, Applicability of judgments, Adjustment under section 200A.

Analysis:
1. Late Filing Fees u/s 234E: The appellant, a private limited company running hotels, filed TDS returns belatedly for assessment years 2013-2016. The Assessing Officer imposed fees and interest under section 234E r.w.s. 200A of the I.T. Act for late filing. The CIT(A) upheld the orders for 13 quarters filed after 01.06.2015, citing a local High Court judgment. For 8 quarters with over two years delay, the CIT(A) found insufficient cause for delay.

2. Principles of Natural Justice: The appellant contended that the CIT(A) failed to comply with principles of natural justice by not considering the reasons for delay adequately. The appellant sought condonation of delay due to health issues and lack of legal advice, citing relevant case laws emphasizing substantial justice over technicalities.

3. Equitable Order: The Tribunal noted the appellant's plea for condonation of delay, highlighting personal and project-related challenges leading to the delay in filing appeals. Citing Supreme Court judgments, the Tribunal emphasized the need for justice based on merits rather than technicalities, especially when substantial justice is at stake.

4. Applicability of Judgments: The Tribunal referred to a local High Court judgment stating that demand u/s 200A for fees u/s 234E prior to 01.06.2015 was impermissible. It highlighted that adjustments under section 200A were enabled only from 01.06.2015, thus disallowing the levy of fees u/s 234E for the relevant assessment years.

5. Delay Condonation: The Tribunal accepted the appellant's reasoning for delay condonation, emphasizing the legal provisions and judgments supporting the appellant's case. It held that the CIT(A) erred in dismissing appeals based on delay for 8 quarters where the appellant's reasons were valid and legally supported.

6. Adjustment under Section 200A: The Tribunal clarified that prior to 01.06.2015, no provision existed for adjustments under section 200A for fees u/s 234E. Relying on the local High Court judgment, the Tribunal ruled that the Assessing Officer could not make adjustments for the relevant assessment years, thereby allowing the appeals filed by the appellant.

This comprehensive analysis of the judgment outlines the issues raised, the arguments presented, and the legal principles applied by the Tribunal in deciding the appeals filed by the appellant against the CIT(A) order.