2023 (4) TMI 107 - AT - Income Tax

Late filing fee u/s. 234E - intimation issued U/s. 200Ain respect of defaults before 01/06/2015 - HELD THAT - As 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 in the order passed U/s. 200A - Since hold that the no late filing fee is to be charged, the consequential interest charged U/s. 220(2) of the also does not survive. Thus, the grounds raised by the assessee are allowed. Whether the return pertaining to the period prior to 01/06/2015 but filed after 01/06/2015 and processed after 01/06/2015 attract the amended provisions of section 200A r.w.s. 234E inserted w.e.f 01/06/2015 which is a specific provision for levy of fee for default in furnishing the TDS statements belatedly? - AO vide order passed U/s. 200A, dated 10/06/2016 imposed a late fees u/s. 234E of the Act. In this case since the assessee has filed its TDS returns on 07/06/2016 whereas the due date is 15th May, 2016 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. As well, the Ld. CIT(A), NFAC without discussing the issue on merits, dismissed the assessee s appeal on the issue of condonation of delay. Therefore, 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.

Summary

Issues Involved:
1. Levy of late filing fee under Section 234E of the Income Tax Act, 1961.
2. Applicability of Section 200A for computation of fee prior to 01/06/2015.
3. Condonation of delay in filing appeals.

Summary:

Issue 1: Levy of Late Filing Fee Under Section 234E
The assessee contested the levy of late filing fee under Section 234E of the Income Tax Act, 1961, arguing that the enabling provision for computation of fee while processing the statements was inserted in Section 200A only w.e.f 1/6/2015. The Tribunal held that the charging section i.e., Section 234E cannot be enforced for periods prior to 1/6/2015. The Tribunal relied on the judgments of the Hon'ble Karnataka High Court in Fatheraj Singhvi vs. Union of India, the Hon'ble Kerala High Court in United Metals vs. ITO (TDS), and the Pune Bench of the Tribunal in Medical Superintendent Rural Hospital, Nashik vs. DCIT, CPC (TDS). The Tribunal directed the deletion of the fee levied under Section 234E for the periods prior to 1/6/2015.

Issue 2: Applicability of Section 200A for Computation of Fee Prior to 01/06/2015
The Tribunal observed that the amended provision for computation of fee under Section 200A applies only for returns pertaining to the period after 1/6/2015. Therefore, returns for periods prior to 1/6/2015, even if filed or processed after 1/6/2015, do not attract the amended provisions. This interpretation was supported by the Hon'ble Karnataka High Court and the Hon'ble Kerala High Court, which held that the amendment in Section 200A is prospective in nature.

Issue 3: Condonation of Delay in Filing Appeals
The Ld. CIT(A)-NFAC dismissed the appeals due to an inordinate delay of 976 days in filing without sufficient cause. The Tribunal, however, focused on the merits of the case and concluded that the late fee under Section 234E should not have been levied for periods prior to 1/6/2015, thus allowing the appeals for AYs 2013-14 to 2015-16.

AY 2016-17:
For AY 2016-17, the Tribunal upheld the levy of late fee under Section 234E since the returns were filed after the insertion of the specific provision for levy of late fee on 01/06/2015. The appeals for AY 2016-17 were dismissed as the levy was in accordance with the law.

Conclusion:
The appeals for AYs 2013-14 to 2015-16 were allowed, and the late fee levied under Section 234E was directed to be deleted. The appeals for AY 2016-17 were dismissed, upholding the levy of late fee as per the amended provisions.