2022 (9) TMI 410 - AT - Income Tax

Levy of late fees u/s 234E - belated submission of tax deducted at source statement - Intimation u/s 200A - Retrospective operation of provisions of section 234E - 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 dedutor as fee u/s 234E of the Act. The Hon ble Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India 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.- Appeal of assessee allowed.

Summary

Issues:
Appeals against late fee under section 234E of the Income Tax Act for assessment years 2013-14, 2014-15, and 2015-16.

Analysis:
The appeals were filed against the late fee imposed under section 234E of the Income Tax Act by the Assistant Commissioner of Income Tax, CPC-TDS, Ghaziabad. The primary issue revolved around the levy of late fees under section 234E. The tribunal noted that the amendment providing for the computation of late fees under section 234E came into effect only from 01.06.2015. Referring to the Hon'ble Karnataka High Court's decision in the case of Fatheraj Singhvi vs. Union of India, it was held that the provisions of section 234E are substantive and can only be levied prospectively from 01.06.2015. The tribunal emphasized that any demand for late fees under section 234E for periods before 01.06.2015 was without legal authority. Consequently, the tribunal set aside the impugned notices under section 200A related to the computation and intimation for payment of late fees under section 234E for periods prior to 01.06.2015.

The tribunal further highlighted that the decision was in line with the Coordinate Bench of Pune Tribunal's rulings in various cases. The Hon'ble Bombay High Court's decision on the constitutional validity of section 234E did not impact the retrospective operation of the provisions. Consequently, the tribunal directed the ACIT, CPC-TDS, Ghaziabad to delete the late fees levied under section 234E. As a result, the appeal filed by the assessee for the assessment year 2013-14 was allowed. The tribunal extended the same decision to the remaining sixteen appeals for assessment years 2013-14, 2014-15, and 2015-16, allowing all seventeen appeals of the assessee.

In conclusion, the tribunal ruled in favor of the assessee in all seventeen appeals, setting aside the late fee imposed under section 234E for periods before 01.06.2015. The tribunal emphasized the prospective application of the late fee provisions under section 234E and directed the concerned authority to delete the late fees. The decision was based on the substantive nature of section 234E and the lack of legal authority to demand late fees for periods predating 01.06.2015.