2022 (12) TMI 791 - AT - Income Tax

Levying the late filing fee u/s. 234E - delay in filing the TDS statement - genuine hardship to the assessee - reasonable cause on the part of the appellant Educational Society which resulted in delay in filing the TDS statement - HELD THAT - Assessee had deducted tax at source u/s. 195 of the Act but belatedly filed the returns on 27/11/2015 under the bonafide intention that the amended provisions will not attract for levy of late fee u/s. 234E of the Act since the due date for filing the returns for Q1 of FY 2014-15 is 30/06/2014. AYs 2016-17 2017-18 - AO vide order passed U/s. 200A, imposed late fees U/s. 234E of the Act. In these cases since the assessee has filed its TDS returns on 12/02/2018 which is after the date of insertion of specific provision for levy of late fee U/s. 234E ie., 01/06/2015. Therefore, the action taken by the Ld. AO in levying the late fee for default in furnishing the TDS statement beyond the stipulated time is in accordance with law. Therefore, we have no hesitation to come to a conclusion that the orders of the Ld. Revenue Authorities invoking the provisions of section 234E in order to levy late fee for default in furnishing the TDS statement beyond the stipulated time is in accordance with law and accordingly the grounds raised by the assessee are hereby dismissed. Since the period under consideration is the 1st Quarter of FY 2014-15 ie., prior to the amendment to section 200A(1) of the Act wherein clause (c) was inserted w.e.f 01/06/2015 and the assessee had already deposited the tax at source prior to the amendment to section 200A(1), the levy of late fee u/s. 234E for default in furnishing the statement beyond the stipulated time is not sustainable in law. Respectfully following the ratio laid down in the judgment in the case of Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT , in the case of United Metals 2021 (12) TMI 1349 - KERALA HIGH COURT and the levying of late fee u/s 234E for the period prior to 1/6/2015 is not sustainable in law. Thus, in the instant case since the period of default was before the said date ie., 01/06/2015, there is no merit in charging late filing fee u/s. 234E of the Act. Accordingly the Ld. AO is directed to delete the fee levied U/s. 234E of the Act in the order passed U/s. 154 r.w.s 200A of the Act Thus, the grounds raised by the assessee are allowed.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Levy of late filing fee under Section 234E of the Income Tax Act, 1961.
3. Application of amended provisions of Section 200A w.e.f. 01/06/2015.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The Tribunal noted a delay of 4 days in filing the appeals. The assessee explained that the delay was due to the chartered accountant being busy with tax audits. The Tribunal found this reason to be beyond the control of the assessee and not intentional. Therefore, the delay was condoned in the interest of substantial justice.

2. Levy of Late Filing Fee Under Section 234E:
The assessee argued that the CPC-TDS was incorrect in levying the late filing fee under Section 234E for the periods prior to the insertion of the enabling provision in Section 200A by the Finance Act, 2015, effective from 01/06/2015. The Tribunal referred to several judicial precedents, including the judgments of the Karnataka High Court in Fatheraj Singhvi vs. Union of India and the Kerala High Court in United Metals vs. ITO (TDS). These judgments held that the fee under Section 234E could not be levied for periods prior to 01/06/2015, even if the returns were filed or processed after this date. The Tribunal concluded that the levy of late fee under Section 234E for defaults occurring before 01/06/2015 was not sustainable in law. Consequently, the Tribunal allowed the appeals for AYs 2015-16, 2016-17, and 2017-18, directing the deletion of the late fee levied under Section 234E.

3. Application of Amended Provisions of Section 200A w.e.f. 01/06/2015:
For AYs 2016-17 and 2017-18, the Tribunal examined whether the returns filed after 01/06/2015 but pertaining to periods before this date should attract the amended provisions of Section 200A. The Tribunal observed that the enabling provision for the computation of fee under Section 234E was inserted in Section 200A only w.e.f. 01/06/2015. Therefore, the fee could not be enforced for periods prior to this date. However, in cases where the TDS statements were filed after 01/06/2015, the Tribunal upheld the levy of late fee under Section 234E, as the returns were filed beyond the stipulated time after the amendment came into effect. Consequently, the appeals for these periods were dismissed.

Separate Judgments Delivered:
The Tribunal delivered separate judgments for different assessment years, allowing the appeals for AYs 2015-16, 2016-17, and 2017-18, and dismissing the appeals for AYs 2016-17 and 2017-18 where the returns were filed after the amendment date of 01/06/2015.

Conclusion:
The Tribunal's order reflects a thorough consideration of the legal provisions and judicial precedents, leading to the condonation of delay in filing appeals, the deletion of the late fee for periods prior to 01/06/2015, and upholding the levy of late fee for returns filed after this date.