2024 (8) TMI 752 - AT - Income Tax

Levy of late fees u/s. 234E - default in furnishing the said TDS statements - THAT - The charging mechanism u/s. 234E as triggered with the Department from 01.06.2015, only prospectively and not prior to that. Therefore, the power to the Department u/s. 234E is provided from F.Y.2015-2016 relevant from Assessment Year 2016-2017. Having said that if TDS statements are filed after 01.06.2015 then the Revenue Authorities shall exercise the power to levy late fees u/s. 234E of the Act for default in furnishing the said TDS statements. Resultantly, the late fee u/s. 234E of the Act can be levied only prospectively i.e. w.e.f. 01.06.2015 as held in the case of Fatheraj Singhvi v. Union of India 2016 (9) TMI 964 - KARNAT AKA HIGH COURT and this ratio was followed in Gajanan Construction 2016 (10) TMI 92 - ITAT PUNE ; M/s Allacode Technology Solution (P) Ltd. 2022 (11) TMI 526 - ITAT PUNE ; Maharashtra Cricket Association, Pune 2016 (10) TMI 104 - ITAT PUNE Admittedly, with regard to the matters for adjudication before me, all of them pertains to Financial Years 2012-2013; 2013-2014; 2014-2015 relevant to Assessment Years 2013-2014; 2014-2015 and 2015-2016 respectively and obviously therefore the late fees u/s. 234E of the Act in all these cases were levied prior to 01.06.2015 i.e. prior to F.Y.2015-2016 relevant to Assessment year 2016-2017 onwards and during the said time the Department did not had the power to impose the late fees as per the stated provisions of the Act. Such an act of the Department is held to be arbitrary, unlawful, void ab initio. AO is directed to delete the additions/late fee charges from the hands of assessee.

Summary

The appeals challenge the levy of late fees under section 234E of the Income Tax Act, 1961. The Tribunal rules that late fees can only be imposed prospectively from 01.06.2015. As the late fees were imposed before this date, they are deemed arbitrary and void. The appeals are allowed, and the late fee charges are directed to be deleted.