2016 (11) TMI 1243 - AT - Income Tax

Fees payable under section 234E charged - Intimation issued under section 200A - Held that - Where the amendment to section 200A(1) of the Act is procedural in nature, then the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Accordingly, intimation issued by the Assessing Officer under section 200 A of the Act in all the appeals does not stand and the demand raised by charging the fees under section 234E of the Act is not valid and the same is deleted. The grounds of appeal raised by the assessee are thus, allowed.

Summary

Issues Involved:
1. Charging of fees under section 234E of the Income-tax Act, 1961.
2. Applicability of amendment to section 200A(1)(c) of the Income-tax Act, 1961.

Detailed Analysis:

1. Charging of Fees under Section 234E of the Income-tax Act, 1961:

The primary issue in these appeals is the charging of fees under section 234E of the Act. The assessee argued that late fees under section 234E could not be levied for TDS statements filed before 01.06.2015 because the amendment to section 200A(1)(c) was not retrospective. The Tribunal referred to the relevant provisions of the Act, including sections 200, 200A, and 234E. It was noted that section 234E, inserted by the Finance Act, 2012, imposed fees for late filing of TDS statements, but the power to levy these fees while processing TDS statements was given to the Assessing Officer only by the Finance Act, 2015, effective from 01.06.2015.

2. Applicability of Amendment to Section 200A(1)(c) of the Income-tax Act, 1961:

The Tribunal emphasized that the amendment to section 200A(1)(c) by the Finance Act, 2015, which enabled the computation of fees under section 234E during the processing of TDS statements, was prospective and not retrospective. The Tribunal cited the Memorandum explaining the Finance Bill, 2015, which clarified that the amendment was intended to be effective from 01.06.2015. The Tribunal also referred to various judicial precedents, including the decision of the Hon’ble Karnataka High Court in Sri Fatheraj Singhvi & Ors Vs. Union of India & Ors, which held that the amendment to section 200A was prospective and that intimation raising demand prior to 01.06.2015 under section 200A levying fees under section 234E was invalid.

Conclusion:

The Tribunal concluded that the Assessing Officer was not empowered to charge fees under section 234E while processing TDS statements filed before 01.06.2015. Consequently, the intimation issued under section 200A in these cases, charging fees under section 234E, was invalid and the demand raised was deleted. The appeals filed by the assessee were allowed.

Order:

The consolidated order was pronounced on 30th September 2016, allowing all the appeals of the assessee.