2023 (3) TMI 1351 - AT - Income Tax

Levy of late filing fee on account of delay in filing of TDS statements u/s. 234E - contention of the assessee before the ld. CIT(A) was that the assessee is a Government Authority working under the Department of Law, State of Gujarat - HELD THAT - As from the language of section 200A of the Act, it is clear that responsibility of preparing statement of TDS is on the person who has deducted any sum u/s. 200 of the Act. However, in the instant facts, it is unclear to us as to how the assessee is under an obligation to file TDS return in respect of taxes deducted at source by the Government of Gujarat, specially when the remuneration to the public prosecutors have been given directly by the Gujarat State in their bank accounts. CIT(A) while upholding the levy of fee u/s. 200A of the Act did not enquire into the aspect whether the assessee was under a legal obligation to file TDS return in respect of TDS so deducted (and subsequently deposited by the Government of Gujarat to the Central Government) and paid directly to the bank account of public prosecutors. We are hereby restoring the file back to the ld. CIT(A) to analyze under what capacity the assessee is filing TDS returns and whether the assessee in the first instance, is under an obligation, to file statement of tax deducted at source u/s. 200A - Appeals of the assessee are allowed for statistical purposes.

Summary

Issues involved:
The judgment concerns the levy of late filing fee on TDS statements under section 234E of the Act by the TDS Central Processing Cell, focusing on whether the assessee, a Government Authority, was obligated to file TDS returns for certain quarters due to delays caused by lack of information from the Government Treasury.

Summary of Judgment:

Issue 1: Levy of late filing fee under section 234E of the Act
The appeals were filed against the order of the ld. CIT(A) confirming the levy of late filing fee on the assessee for delayed TDS statements. The contention was that the levy of fee under section 234E is a compulsory levy, not a penalty, as per the provisions of section 200A of the Act. The CIT(A) upheld the Assessing Officer's action in levying the fee, stating no infirmity in the same.

Issue 2: Obligation of the assessee to file TDS returns
The assessee argued that the delay in filing TDS returns was due to lack of information from the Government Treasury, beyond their control. However, it was observed that the remuneration to public prosecutors was directly paid by the Government of Gujarat, responsible for TDS deduction and crediting to the Central Government. Section 200 of the Act mandates the person deducting tax to pay it to the Central Government, raising questions on the assessee's role in filing TDS returns when remuneration is directly paid by the Government.

Judgment Outcome:
The Tribunal found it unclear why the assessee was obligated to file TDS returns when the Government directly paid remuneration to public prosecutors. The matter was remanded to the ld. CIT(A) to analyze the assessee's capacity in filing TDS returns and determine if there was a legal obligation to do so. Consequently, the appeals of the assessee were allowed for statistical purposes for all the years under consideration.

This summary provides a detailed overview of the issues involved in the judgment, outlining the arguments presented by the parties and the Tribunal's decision to remand the matter for further analysis.