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2017 (3) TMI 1482 - AT - Income TaxLevy of fees under section 234E in intimation issued under section 200A(1) - scope of amendment to section 200A(1) - Held that - Following the referred decision in the case of Gajanan Constructions and others 2016 (11) TMI 1247 - ITAT PUNE we hold that the amendment to section 200A(1) is prospective in nature and therefore the AO, while processing the TDS statements/returns in the present appeal for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Therefore the intimations issued by the AO under section 200A of the Act in this appeal are unsustainable and the demand raised by way of charging of the fees under section 234E of the Act not being valid is deleted. AO is not empowered to charge fees under section 234E of the Act by way of intimation issued under section 200A of the Act in respect of defaults before 01.06.2015 and consequently allow the ground of appeal raised by the assessee.
Issues Involved:
1. Condonation of delay in filing appeals. 2. Legality of late fee levied under section 234E of the Income Tax Act. 3. Authority of the Assessing Officer to levy fees under section 234E prior to the amendment to section 200A(1)(c) by the Finance Act, 2015. 4. Maintainability of appeals against intimations issued under section 200A. Issue-Wise Detailed Analysis: 1. Condonation of Delay in Filing Appeals: The appellants filed petitions for condonation of a 17-day delay in filing the appeals. The Tribunal referred to the principles laid down by the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Others, emphasizing that substantial justice should prevail over technical considerations. The Tribunal accepted the explanations provided by the assessees and condoned the delay, admitting the appeals for adjudication. 2. Legality of Late Fee Levied under Section 234E: The primary issue in these appeals was the legality of the late fee levied under section 234E of the Income Tax Act for defaults in furnishing TDS statements before the amendment to section 200A(1)(c) by the Finance Act, 2015, effective from 01.06.2015. The assessees contended that the Assessing Officer (AO) did not have the authority to levy such fees for periods prior to the amendment. The Tribunal noted that section 234E, introduced by the Finance Act, 2012, imposes a fee for late filing of TDS statements, but the power to levy this fee while processing TDS returns was only granted to the AO by the amendment to section 200A(1)(c), effective from 01.06.2015. 3. Authority of the Assessing Officer to Levy Fees under Section 234E Prior to the Amendment: The Tribunal relied on the decision of the ITAT Pune Bench in the case of Gajanan Constructions and others, which held that the AO was not empowered to levy fees under section 234E while processing TDS statements for periods prior to 01.06.2015. The Tribunal reasoned that the amendment to section 200A(1)(c) was prospective in nature, and thus, the AO could not levy such fees for defaults occurring before the amendment date. 4. Maintainability of Appeals Against Intimations Issued Under Section 200A: The Tribunal addressed the issue of whether appeals against intimations issued under section 200A are maintainable. It referred to the Memorandum explaining the Finance Bill, 2015, which clarified that such intimations are subject to rectification under section 154, appealable under section 246A, and deemed as notices of payment under section 156. The Tribunal concluded that the CIT(A) erred in holding that no appeal is maintainable against such intimations. It held that the demand raised by charging fees under section 234E is appealable and reversed the CIT(A)'s findings. Conclusion: The Tribunal allowed the appeals, holding that the AO was not empowered to levy fees under section 234E for periods prior to 01.06.2015, and the intimations issued under section 200A for such periods were unsustainable. The demands raised by charging fees under section 234E were deleted, and the appeals were allowed on both the procedural and substantive grounds. The order was pronounced in the open court on 1st March 2017.
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