2022 (1) TMI 177 - AT - Income Tax

Late filing fee u/s 234E of the Act by passing the order u/s 200A - Application to processing of TDS return/statement prior to 01.06.2015 - HELD THAT - When undisputedly levy has been made by the A.O in all appeals under consideration prior to 1st June, 2015 by invoking the provisions contained u/s 234E the same is not sustainable in the eyes of law. No doubt Hon‟ble High Court of Bombay in case of Rashmikant Kundalia 2015 (2) TMI 412 - BOMBAY HIGH COURT the constitutional validity of Sec. 234E of the Act has been, upheld, the same is not applicable to the facts of the cases at hand by virtue of the amendment to Sec. 200A by way of Finance Act, 2015 effective from 1st June, 2015 because A.O had issued intimation u/s 200A of the Act prior to 01.06.2015. No doubt, provisions contained u/s 234E were inserted by the Finance Act, 2012 imposing a liability upon deductor where TDS statement/returns were filed belatedly to pay fee as per the said section, Assessing Officer is to collect said fee chargeable u/s 234E of the Act for which machinery provisions have been provided u/s 200A of the Act to be effective from 01.06.2015. When undisputedly A.O has not invoked the provisions contained u/s 234E prior to 1st June, 2015 as required u/s 200A the levy is not sustainable, the said amendment being prospective in nature and cannot be applied in processing of TDS return/statement prior to 01.06.2015 - See SIBIA HEALTHCARE PRIVATE LIMITED VERSUS DY. COMMISSIONER OF INCOME-TAX (TDS) , CENTRALIZED PROCESSING CELL, GHAZIABAD 2015 (6) TMI 437 - ITAT AMRITSAR Thus CIT(A) have erred in levying /confirming the late filing fee u/s 234E of the Act by passing the order u/s 200A of the Act. - Decided in favour of assessee.

Summary

Issues:
- Applicability of amended provisions u/s 200A by Finance Act, 2015 to cases decided prior to 1st June, 2015.

Analysis:
1. The appeals challenged the late filing fees levied by the Assessing Officer (A.O) u/s 234E of the Income Tax Act, 1961, confirmed by the ld. CIT(A).
2. The key contention was whether the amendment to section 200A effective from 1st June, 2015, was applicable to cases decided before that date.
3. The assessee argued that the late fee was not leviable due to the amendment and cited relevant tribunal decisions in support.
4. The revenue contended that the A.O had the power to levy late filing fees u/s 234E, referring to High Court decisions.
5. The Tribunal examined sections 234E and 200A of the Act to determine the issue at hand.
6. Section 200A was amended by Finance Act, 2015, introducing changes in the computation of fees and refunds.
7. The central question was whether the amended provisions applied to cases decided before 1st June, 2015.
8. The Tribunal noted that similar issues had been decided in favor of the assessee by the coordinate bench in previous cases.
9. It was established that the A.O's levy of late fees under section 234E before 1st June, 2015, was not sustainable due to the prospective nature of the amendment.
10. The Tribunal emphasized that the machinery provisions under section 200A were to be effective from 1st June, 2015, and could not be applied retroactively.
11. The Tribunal referred to a specific case where it was held that the adjustment in respect of levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A.
12. Consequently, the Tribunal concluded that the A.O and ld. CIT(A) erred in levying/confirming the late filing fee u/s 234E by passing the order u/s 200A, and ordered the penalty to be deleted.
13. As a result, the appeals filed by the assessee were allowed, and the impugned levy of fee under section 234E was deemed unsustainable in law.

This detailed analysis of the judgment highlights the legal arguments, statutory provisions, and precedents considered by the Tribunal in reaching its decision on the applicability of the amended provisions to the case at hand.