2016 (2) TMI 627 - AT - Income Tax

Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that - We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT 2015 (6) TMI 437 - ITAT AMRITSAR adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.

Summary

Issues Involved:
- Appeal against confirmation of late fees under section 234E for four quarters for late filing of statement for the financial year 2013-14.

Analysis:
1. The assessee appealed against the confirmation of late fees under section 234E for four quarters for late filing of TDS statement for the financial year 2013-14. The assessee argued that the provision of section 200A of the Income Tax Act does not cover late fees and that the revenue authorities were wrong in imposing the penalty. The assessee cited precedents where similar penalties were deleted by the ITAT, Ahmedabad Bench. The Revenue authorities, on the other hand, relied on their orders.

2. The Tribunal observed that the ITAT, Amritsar Branch held that the Assessing Officer was not empowered to charge fees under section 234E while processing under section 200A. The ITAT, Ahmedabad Bench followed this decision in various cases. Citing the case of Lions Club of North Surat Charitable Trust, the Tribunal noted that the adjustment of levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. The Tribunal emphasized that the intimation under section 200A could not include a demand for such fees.

3. The Tribunal highlighted the amendment in Section 200A brought by the Finance Act 2015, which allowed for the computation of fees under section 234E in the processing of TDS statements post-June 2015. However, since the impugned order was passed before this amendment, the Tribunal held that the levy of late filing fees under section 234E was unsustainable in law. The Tribunal, therefore, deleted the levy of fees in favor of the assessee based on the judicial precedents and legal provisions.

4. The Tribunal noted that the Departmental Representative did not present any contrary judgments to challenge the view taken by the Tribunal. Consequently, the Tribunal upheld the judicial precedent set in previous cases and allowed the appeal of the assessee, deleting the levy of late filing fees imposed upon the assessee. The appeal was allowed in favor of the assessee.

5. In conclusion, the Tribunal ruled in favor of the assessee, deleting the late filing fees under section 234E for all quarters. The decision was based on the interpretation of relevant legal provisions and judicial precedents, emphasizing the limitations of adjustments permissible under section 200A and the timing of the amendment allowing for the computation of fees under section 234E.