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2018 (11) TMI 46 - AT - Income TaxLevy of late filing fees u/s 234E while issuing intimation u/s 200A - scope of amendment to section 200A - Held that - In the present case, the undisputed facts are that the assessee filed its TDS return (Form 26Q) for the fourth quarter of financial year 2012-13 on 1.10.2013 and the same was processed and intimation under section 200A was issued vide order dated 25.12.2013 much prior to the amendment to section 200A w.e.f. 1.6.2015 empowering the AO levying the fees under section 234E of the Act. It is therefore not a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 1.6.2015 and thereafter, the demand for payment of fees under section 234E has been raised by the Assessing officer. In case of Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT has held that the provisions of amended section 200A are prospective in nature. Further, the decision in case of M/s. Dundlod Shikshan Sansthan and Others 2015 (9) TMI 807 - RAJASTHAN HIGH COURT as relied by CIT (A) is in the context of validity of section 234E, but not in the context of power of AO for levy of fee under section 234E prior to 1.6.2015. In view of the above, AO while processing the TDS statements for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted.
Issues Involved:
1. Levy of fees for delay in filing the TDS return under Section 234E of the Income Tax Act, 1961. 2. Validity of the impugned levy of fees under Section 234E in the order passed under Section 200A of the Act. Detailed Analysis: 1. Levy of Fees for Delay in Filing the TDS Return under Section 234E: The Commissioner of Income Tax (Appeals)-3, Jaipur, confirmed the levy of fees for delay in filing the TDS return under Section 234E of the Income Tax Act, 1961. The assessee argued that the CIT(A) should have directed the waiver of the said fees, considering the facts and circumstances of the case. The CIT(A) relied on the Rajasthan High Court's decision in M/s Dundlod Shikshan Sansthan v. Union of India, which upheld the constitutional validity of Section 234E and the levy of fees for late filing of TDS returns. However, the Tribunal found that the CIT(A) misinterpreted the decision as it did not address the mechanism of levying fees under Section 234E while processing TDS statements under Section 200A. 2. Validity of the Impugned Levy of Fees under Section 234E in the Order Passed under Section 200A of the Act: The assessee contended that the power to collect fees under Section 234E by the prescribed authority was vested only by the substitution of clause (c) to Section 200A(1) by the Finance Act, 2015, effective from 01.06.2015. Therefore, the Assessing Officer had no authority to charge the fees under Section 234E while issuing intimation under Section 200A before this date. The Tribunal agreed with the assessee, referencing several judgments, including the Karnataka High Court's decision in Fatheraj Singhvi v. Union of India, which held that the amendment to Section 200A is prospective. Consequently, the AO's action of levying fees under Section 234E for periods before 01.06.2015 was outside the scope of Section 200A and invalid. Condonation of Delay: The Tribunal also addressed the delay in filing the appeals. The assessee attributed the delay to the unavailability of the concerned employee responsible for TDS returns and filing appeals. The Tribunal found the explanation bona fide and condoned the delay, emphasizing that substantial justice should be preferred over technical considerations. Conclusion: The Tribunal concluded that the Assessing Officer was not empowered to charge fees under Section 234E while processing TDS statements for periods prior to 01.06.2015. The demands raised by charging the fees under Section 234E were deemed invalid and were deleted. The appeals of the respective assessees were allowed. Order Pronounced: The order was pronounced in the open Court on 29/10/2018.
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