2024 (7) TMI 33 - AT - Income Tax

Levy of late fee under section 234E - belated filing of quarterly TDS returns beyond prescribed date - Scope of amendment to section 200A by Finance Act 2015 w.e.f. 01.06.2015 - HELD THAT - As we find that the assessment years involved are prior to 01.06.2015. Therefore we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act while processing quarterly TDS return under section 200A of the Act is without any authority and invalid. Hence respectfully following the decisions of True Blue Voice India Private Limited 2023 (10) TMI 1141 - MADRAS HIGH COURT and M/s. M.F. Textiles Pvt. Ltd. 2022 (2) TMI 1340 - ITAT CHENNAI we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Since late fee charged in the present case pertaining to the financial years 2012-2013 and 2013-14 we direct the Assessing Officer to delete the late fee charged under section 234E of the Act in the intimation issued under section 200A of the Act for the processing of quarterly TDS return filed by the assessee. Decided in favour of assessee.

Issues Involved:
1. Validity of Section 234E of the Income Tax Act.
2. Applicability of Section 234E prior to the amendment in Section 200A effective from 01.06.2015.
3. Jurisdiction of CIT(A) in levying late fees under Section 234E for periods prior to 01.06.2015.

Issue-wise Detailed Analysis:

1. Validity of Section 234E of the Income Tax Act:
The primary issue revolves around the constitutional validity of Section 234E, which imposes a fee for late filing of TDS returns. The CIT(A) upheld the validity of Section 234E, citing various High Court decisions. The Tribunal acknowledged that the constitutional validity of Section 234E has been upheld by the High Courts and noted that the late fee was required to be levied and collected from 01.07.2012.

2. Applicability of Section 234E prior to the amendment in Section 200A effective from 01.06.2015:
The Tribunal examined whether late fees under Section 234E could be imposed while processing TDS returns under Section 200A for periods before the amendment effective from 01.06.2015. The Tribunal referred to the decision of the Hon'ble Jurisdictional Madras High Court in the case of M/s. True Blue Voice India Private Limited, which clarified that the Department could not impose late fees under Section 234E while processing TDS returns under Section 200A for periods prior to the amendment. The High Court emphasized that Section 200A(1)(c) was introduced to provide a mechanism for computing fees under Section 234E, effective from 01.06.2015. Therefore, for periods before this date, the authorities were not empowered to levy late fees while processing TDS statements under Section 200A.

3. Jurisdiction of CIT(A) in levying late fees under Section 234E for periods prior to 01.06.2015:
The Tribunal found that the CIT(A) exceeded his jurisdiction by upholding the levy of late fees under Section 234E for periods prior to the amendment in Section 200A. The Tribunal noted that the CIT(A) relied on Section 292B to cure procedural defects, but this was not applicable in the given context. The Tribunal reiterated that the Assessing Officer could not levy late fees for periods before 01.06.2015, as there was no enabling provision under Section 200A to do so.

Conclusion:
The Tribunal concluded that the late fees charged by the Assessing Officer under Section 234E for the assessment years 2012-2013 and 2013-2014 were without authority and invalid. The Tribunal directed the Assessing Officer to delete the late fees charged under Section 234E in the intimation issued under Section 200A for the processing of quarterly TDS returns filed by the assessee. Consequently, all six appeals filed by the assessee were allowed.

Order Pronouncement:
The order was pronounced in the open court on 26th June 2024 at Chennai.

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