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2017 (2) TMI 857 - AT - Income TaxLevy of fee u/s 234E for late filing of quarterly e-TDS returns u/s 200(3) - Held that - There is no enabling provision in section 200A of the Act before insertion of sub-clause (c) into section 200A of the Act by the Finance Act 2015 w.e.f. 1.6.2015 and hence no adjustments can be made towards late fee payable u/s 234E of the Act for belated filing of TDS statements u/s 200(3) of the Act while issuing intimation u/s 200A of the Act for processing TDS statements filed and processed for the assessment years prior to 1.6.2015. In these cases admittedly all the TDS returns has been filed and processed by the TDS CPC before 1.6.2015. Therefore we are of the view that fee payable u/s 234E of the Act cannot be levied while processing TDS statements u/s 200A of the Act. The CIT(A) without appreciating the facts simply upheld the action of the A.O. in levying late fee u/s 234E of the Act. Hence we reverse the CIT(A) order and direct the A.O. to delete additions made towards late fee u/s 234E of the Act.
Issues Involved:
1. Levy of fee under section 234E of the Income Tax Act, 1961 for late filing of quarterly e-TDS returns under section 200(3) of the Act. 2. Whether the amendment to section 200A of the Act, providing for adjustment for defaults under section 234E, is retrospective or prospective in operation. Issue-Wise Detailed Analysis: 1. Levy of Fee under Section 234E for Late Filing of Quarterly e-TDS Returns: The primary issue in these appeals concerns the levy of a fee under section 234E of the Income Tax Act, 1961 for the late filing of quarterly e-TDS returns under section 200(3) of the Act. The assessee filed quarterly e-TDS returns belatedly after the due date specified under section 200(3) and Rule 31A of the Income Tax Rules, 1962. The TDS returns were processed by the TDS, CPC, which issued intimation under section 200A demanding late filing fees payable under section 234E. The assessee contended that the demand raised by the CPC, TDS for late filing fees under section 234E could not be raised through the processing of TDS statements, as section 200A did not cover the default in payment of late fees under section 234E. The CIT(A) upheld the levy, concluding that the amendment to section 200A, which provided for the computation of fees under section 234E, was declaratory and could be applied retrospectively. 2. Retrospective or Prospective Operation of the Amendment to Section 200A: The core of the dispute revolves around whether the amendment to section 200A of the Act, which allows for the computation of fees under section 234E, is retrospective or prospective. The assessee argued that there was no enabling provision in section 200A for such adjustments during the relevant period before the insertion of sub-clause (c) by the Finance Act, 2015, effective from 1.6.2015. The CIT(A) concluded that the amendment was retrospective, relying on judicial precedents, including decisions from the Hon’ble Supreme Court and the Hon’ble Delhi High Court. The Tribunal examined various judgments, including the decision of the Hon’ble High Court of Karnataka in the case of Fatheraj Singhvi Vs. UOI, which held that section 200A enabling the assessing officer to determine fees under section 234E, brought about from 1.6.2015, is prospective. Consequently, no computation of fees for demand or intimation under section 234E could be made for TDS deducted for the respective assessment year prior to 1.6.2015. The Tribunal also referred to the decision of ITAT, Pune in Gajanana Constructions Vs. DCIT, CPC (TDS), Ghaziabad, which held that the power to charge/collect fees under section 234E was vested with the revenue only upon the substitution of clause (c) to section 200A by the Finance Act, 2015, effective from 1.6.2015. Thus, prior to this date, no fees could be levied under section 234E while issuing intimation under section 200A. Conclusion: After considering the arguments and judicial precedents, the Tribunal concluded that there was no enabling provision in section 200A of the Act before the insertion of sub-clause (c) by the Finance Act, 2015, effective from 1.6.2015. Therefore, no adjustments could be made towards late fees payable under section 234E for belated filing of TDS statements under section 200(3) of the Act while issuing intimation under section 200A for the assessment years prior to 1.6.2015. The Tribunal reversed the CIT(A) order and directed the A.O. to delete the additions made towards late fees under section 234E. Outcome: The appeals filed by the assessees were allowed, and the order was pronounced in the open court on 17th February 2017.
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