2018 (6) TMI 284 - AT - Income Tax

Levy of fee u/s 234E - delay in filing TDS statement which was inserted from 01.06.2015 - Scope of amendment to act - Held that - As prior 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid relying on the decisions in the cases of CIT vs. Vatika Township Pvt. Ltd. 2014 (9) TMI 576 - SUPREME COURT Substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. - decided in favour of assessee.

Summary

Issues:
Appeal against levy of fee u/s 234E of the Income Tax Act, 1961 for AY 2013-14.

Detailed Analysis:

1. Delay in Filing Appeals:
- Delay of 24 days in filing appeals for 37 out of 88 branches due to hierarchical approval process.
- Assessee had reasonable cause for delay; delay in filing appeals condoned.

2. Common Issue of Late Filing Fee:
- Common issue in all appeals related to levy of late filing fee u/s 234E.
- Appeals disposed of by consolidated order for convenience.

3. Provisions and Contention:
- Appellants deposited TDS as per Act provisions.
- Contention: Prior to 01.06.2015, no enabling provision in Act u/s 200A for levy of late fee u/s 234E.
- Reliance on case laws supporting absence of enabling provisions for late fee levy.

4. Decision and Rationale:
- CIT(A) upheld levy of late fee u/s 234E, relying on specific case law.
- Appellants argued against retrospective application of late fee provision.
- CIT(A) decision based on machinery provision of Act; upheld levy of late fee.
- Appellants' contention supported by previous judgments; levy of late fee cancelled.

5. Judicial Precedents and Final Decision:
- Previous ITAT decision in similar case favored assessee.
- Cancellation of late fee levy based on retrospective application argument.
- Issue related to short payment of TDS referred back to CIT(A) for proper consideration.
- Orders of CIT(A) reversed; late fee levied under section 234E cancelled.

6. Conclusion:
- Appeals allowed based on retrospective application argument and supporting case laws.
- Order pronounced in open court on 31/05/2018.