2023 (3) TMI 974 - AT - Income Tax

Charging of interest u/s.234E - assessee filed the TDS returns for the respective quarters belatedly -Liability of interest for periods prior to June 1, 2015 - HELD THAT - Section 200A deals with processing of statements of tax deducted at source. Clause (c) of section 200A(1) was inserted by the Finance Act 2015 w.e.f. 01-06-2015 providing for the levy of fee u/s.234E of the Act. In that view of the matter, such fee u/s.234E can be levied only for the default committed after 01-06-2015 and not prior to that. In Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and others ( 2022 (2) TMI 1061 - KERALAHIGH COURT has affirmed the non-imposition of fee for the period prior to 01-06-2015. Similar view has been taken in Jiji Varghese 2022 (3) TMI 1291 - KERALA HIGH COURT holding that no interest u/s 234E can be imposed for the periods of the respective A.Ys. prior to June 1, 2015. Thus, it is seen that the issue raised in these appeals is covered in favour of the assessee.

Summary

Issues:
Charging of interest u/s.234E for quarters relevant to assessment years 2013-14, 2014-15, and 2015-16.

Analysis:
The appeals arose from orders by the National Faceless Appeal Centre (NFAC), Delhi, regarding the imposition of interest u/s.234E. The assessee, a company providing architectural services, filed TDS returns belatedly, leading to the Assessing Officer (AO) levying late fees. The issue raised in all appeals was the confirmation of the fee u/s.234E. Section 200A of the Income-tax Act, 1961, deals with processing TDS statements, with clause (c) inserted by the Finance Act 2015, allowing the levy of fee u/s.234E from 01-06-2015. Precedents like Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and Jiji Varghese Vs. ITO(TDS) & Ors. held that no interest u/s 234E could be imposed for periods before June 1, 2015. Consequently, the Tribunal overturned the orders in favor of the assessee.

Outcome:
All 11 appeals were allowed, with the Tribunal pronouncing the order on 8th March 2023.