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2018 (5) TMI 425 - AT - Income TaxLevy of late fee u/s 234E - Assessee filed E-statements of TDS u/s 200(3) with a delay of 212 days for the quarter ending September, 120 days for the quarter ending December and 196 days for the quarter ending March-2013 - Held that - In the instant case, the TDS returns were filed before 1.6.2015 and processed before 1.6.2015. The late fee was related to the assessment year 2013-14, therefore, the case of the assessee is squarely covered by the decision of SRI. FATHERAJ SINGHVI AND OTHERS Versus UOI 2016 (9) TMI 964 - KARNATAKA HIGH COURT we hold that the A.O. is not empowered to levy late fee prior to 1.6.2015 and accordingly, the late fee levied by the A.O. is cancelled. The orders of the A.O. levying the late fee for both the A.Y 2013-14 and 2014-15 are cancelled and the appeals of the assessee are allowed.
Issues Involved:
1. Levy of late fee under Section 234E of the Income Tax Act, 1961. 2. Enabling provision for the levy of late fee under Section 200A of the Income Tax Act, 1961. 3. Contradictory judgments from different High Courts regarding the levy of late fee under Section 234E. Detailed Analysis: 1. Levy of Late Fee under Section 234E: The appeals concern the levy of late fees under Section 234E of the Income Tax Act, 1961, for delayed filing of TDS statements for the quarters ending September, December, and March of the financial year 2012-13. The Assessing Officer (A.O.) levied late fees of ?42,400/-, ?24,000/-, and ?39,200/- respectively for these quarters due to delays of 212 days, 120 days, and 196 days. The CIT(A) confirmed the late fees, relying on the decision of the Gujarat High Court in Rajesh Kourani Vs. UOI. 2. Enabling Provision for Levy of Late Fee under Section 200A: The appellant argued that although Section 234E was introduced with effect from 1.7.2012, the enabling provision for levying late fees was inserted in Section 200A by the Finance Act, 2015, effective from 1.6.2015. Thus, the power to levy late fees under Section 234E was vested with the revenue only from 1.6.2015. The appellant cited the Karnataka High Court decision in Fatheraj Singhvi, which held that Section 200A enabling the A.O. to determine late fees under Section 234E is prospective and cannot be applied to TDS statements filed before 1.6.2015. 3. Contradictory Judgments from Different High Courts: The Tribunal noted the conflicting judgments from the Karnataka High Court and the Gujarat High Court. The Karnataka High Court ruled in favor of the assessee, stating that late fees under Section 234E could not be levied before 1.6.2015, while the Gujarat High Court ruled in favor of the revenue. The Tribunal referenced the Andhra Pradesh High Court's decision in State of Andhra Pradesh Vs. Commercial Tax Officer, which held that in the case of conflicting judgments, the decision most favorable to the assessee should be adopted. Similarly, the Supreme Court in CIT Vs. Vegetable Products Limited endorsed this view. Tribunal's Conclusion: The Tribunal, after considering the arguments and the conflicting judgments, decided to follow the Karnataka High Court's decision, which is favorable to the assessee. It held that the A.O. is not empowered to levy late fees for TDS statements filed before 1.6.2015. The Tribunal directed the A.O. to delete the late fees levied for the assessment years 2013-14 and 2014-15. Result: The appeals filed by the assessee were allowed, and the orders levying late fees were canceled. The Tribunal's decision was pronounced in the open court on 26th April 2018.
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