2016 (11) TMI 1247 - AT - Income Tax

Levy of fees under section 234E in intimation issued under section 200A(1) - 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. - Decided in favour of assessee

Summary

Issues Involved:
1. Levy of fees under Section 234E of the Income Tax Act.
2. Authority of the Assessing Officer to charge fees under Section 234E while processing TDS returns under Section 200A.
3. Retrospective or prospective application of the amendment to Section 200A(1)(c).
4. Maintainability of appeals against intimation issued under Section 200A.

Detailed Analysis:

1. Levy of Fees under Section 234E:
The central issue is the levy of fees under Section 234E of the Income Tax Act for late filing of TDS returns. Section 234E(1) mandates a fee of ?200 for each day of delay, capped at the amount of tax deductible or collectible. This provision was introduced by the Finance Act, 2012, effective from 01.07.2012.

2. Authority of the Assessing Officer to Charge Fees:
The Tribunal referenced the case of Maharashtra Cricket Association Vs. DCIT, highlighting that the Assessing Officer (AO) lacked the authority to charge fees under Section 234E while processing TDS returns under Section 200A before the amendment by the Finance Act, 2015, effective from 01.06.2015. The Tribunal clarified that prior to this amendment, the AO could not levy fees under Section 234E during the processing of TDS returns.

3. Retrospective or Prospective Application:
The Tribunal held that the amendment to Section 200A(1)(c) by the Finance Act, 2015, which empowered the AO to levy fees under Section 234E, is prospective and not retrospective. The Tribunal emphasized that the enabling provision to charge fees must be applied from the date of its enactment, i.e., 01.06.2015, and cannot be applied to TDS returns processed before this date.

4. Maintainability of Appeals:
The Tribunal addressed whether appeals against intimation issued under Section 200A are maintainable. It was concluded that such intimations are appealable under Section 246A(1)(a) and (c) of the Act. The Tribunal reversed the CIT(A)'s findings, affirming that demands raised under Section 156 of the Act are appealable, thus allowing the assessee's appeals.

Conclusion:
The Tribunal concluded that the AO was not empowered to charge fees under Section 234E while processing TDS returns under Section 200A before 01.06.2015. The amendment to Section 200A(1)(c) is prospective and cannot be applied retrospectively. The Tribunal also affirmed the maintainability of appeals against such intimations, thereby allowing the assessee's appeals.