2024 (3) TMI 685 - AT - Income Tax

Late fee levied u/s 234E r.w.s. 200A - applying section 200A(l)(c) of the Act retrospectively - HELD THAT - As decided in True Blue Voice India (P.) Ltd. 2023 (10) TMI 1141 - MADRAS HIGH COURT respondent had had imposed the late fee only under section 234E of the Act for the assessment years 2012-2013, 2013-2014, 2015- 2015. However, section 200A(c) of the Act was not introduced during the said assessment years. In the absence of any provisions under section 200A of the Act, when they have processed the application for TDS under section 200A, no late fee can be imposed under section 234E. Thus we are of the considered view that the Ld.CIT(A) has fallen in error in sustaining the levy of penalty - Decided in favour of assessee.

Summary

Issues Involved:
The issues involved in the judgment are the levy of late fee under section 234E of the Income Tax Act, 1961, and the dismissal of appeals by the Ld.CIT(A) on grounds of limitation without providing an opportunity of hearing.

Levy of Late Fee under Section 234E:
The Assessee challenged the levy of late fee under section 234E r.w.s. 200A of the Income Tax Act, 1961. The Ld. AR argued that the late fee could only be levied prospectively from 01.06.2015 as per section 200A(l)(c) of the Act, which was introduced on that date. Citing the judgment of the Hon'ble High Court of Madras in True Blue Voice India (P.) Ltd. vs. CCIT, it was contended that the late fee could not be imposed for assessment years before 01.06.2015 when section 200A(c) was not in effect. The Tribunal agreed with this argument and set aside the levy of penalty in one appeal and restored the remaining appeals for fresh consideration.

Dismissal of Appeals on Grounds of Limitation:
The Ld.CIT(A) had dismissed the appeals on grounds of limitation without providing an opportunity of hearing to the Assessee to explain the delay. The Assessee contended that no opportunity was given regarding the dismissal being barred by law. The Tribunal found that the Ld.CIT(A) erred in not granting a hearing to the Assessee to justify the delay in challenging the impugned orders. Consequently, the Tribunal allowed one appeal, quashed the order of Ld.CIT(A), and restored the remaining appeals to be decided afresh on merits after providing the Assessee with an opportunity of hearing. The Tribunal emphasized the importance of giving the Assessee a chance to explain and justify any delays in filing appeals.

In conclusion, the Tribunal ruled in favor of the Assessee regarding the levy of late fee under section 234E and the dismissal of appeals on grounds of limitation. The judgment highlighted the necessity of providing natural justice by granting opportunities of hearing to the parties involved in legal proceedings.