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2023 (6) TMI 84 - AT - Income TaxLate fees levied u/s 234E - interest thereon charged under section 220(2) - whether late fee u/s 234E cannot be charged relating to period of tax deduction prior to 01.06.2015? - HELD THAT - There is no dispute that the issues involved in these appeals are squarely covered in favour of the assessee by the aforesaid orders in the cases of Shivansh Infraestate Pvt. Ltd. vs. ACIT 2022 (8) TMI 439 - ITAT LUCKNOW , Executive Engineer, Tubewell Division Barabanki vs. Income Tax Officer(TDS)-II 2022 (11) TMI 1359 - ITAT LUCKNOW , Dr. Saumya Singh vs. ACIT 2018 (10) TMI 1960 - ITAT LUCKNOW , Fatheraj Singhvi vs. Union of India 2016 (9) TMI 964 - KARNATAKA HIGH COURT , United Metals vs. Income-tax Officer (TDS) 2021 (12) TMI 1349 - KERALA HIGH COURT and Additional DIGP vs. Dy. CIT (TDS) 2020 (9) TMI 285 - ITAT DELHI wherein as held the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. We direct the Assessing Officer to delete the late fees levied under section 234E of the I.T. Act and interest thereon charged under section 220(2) of the I.T. Act - Decided in favour of assessee.
Issues Involved:
1. Levy of late fees under section 234E of the IT Act for periods prior to 01.06.2015. 2. Prospective nature of amendments to section 200A of the IT Act. 3. Reliance on judgments pertaining to the constitutional validity of section 234E. 4. Procedural fairness and natural justice in the appellate process. 5. Treatment of appeals as infructuous due to alleged duplication. Summary of Judgment: Issue 1: Levy of Late Fees Under Section 234E The assessee contested the levy of late fees under section 234E of the IT Act for various quarters, arguing that the late fee cannot be charged for periods prior to 01.06.2015. The Tribunal noted that the issues in dispute were covered in favor of the assessee by several precedents, including Shivansh Infraestate Pvt. Ltd. vs. ACIT, Executive Engineer, Tubewell Division Barabanki vs. Income Tax Officer (TDS)-II, Dr. Saumya Singh vs. ACIT, Fatheraj Singhvi vs. Union of India, United Metals vs. Income-tax Officer (TDS), and Additional DIGP vs. Dy. CIT (TDS). Respectfully following these decisions, the Tribunal directed the Assessing Officer to delete the late fees levied under section 234E and the interest charged under section 220(2) of the IT Act. Issue 2: Prospective Nature of Amendments to Section 200A The assessee argued that the mechanism for computation of fees and failure for payment of fees under section 200A was brought into statute w.e.f. 01.06.2015 and thus should be considered prospective in nature. The Tribunal agreed with the assessee, noting the precedents that supported this view, and directed the deletion of the late fees and interest accordingly. Issue 3: Reliance on Judgments Pertaining to Constitutional Validity The Tribunal observed that the ld. CIT(A) had relied on judgments pertaining to the constitutional validity of section 234E, which was not challenged by the assessee. The Tribunal found that the issue involved was the date of applicability of section 234E, not its constitutional validity, and ruled in favor of the assessee based on the cited precedents. Issue 4: Procedural Fairness and Natural Justice The assessee claimed that the ld. CIT(A) erred by passing the order without providing sufficient time and opportunity to present their case. The Tribunal found merit in this contention and ruled in favor of the assessee, emphasizing the importance of procedural fairness and natural justice. Issue 5: Treatment of Appeals as Infructuous In I.T.A. No.63/LKO/2023, the assessee argued that the ld. CIT(A) wrongly treated the appeal as infructuous, claiming that there were two separate appeals for different forms (24Q and 26Q) for the same quarter. The Tribunal agreed with the assessee, set aside the impugned appellate order, and directed the ld. CIT(A) to pass a fresh order on merits after providing reasonable opportunity to the assessee. Conclusion The appeals in I.T.A. Nos.60, 61, 62, 64 & 65/LKO/2023 were allowed, and the appeal in I.T.A. No.63/LKW/2023 was partly allowed for statistical purposes. The Tribunal directed the deletion of late fees and interest and emphasized procedural fairness in the appellate process.
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