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2019 (9) TMI 607 - AT - Income TaxLate fees payable u/s. 234 - Intimation issued u/s. 200A - late filing of TDS returns - scope of amendment - HELD THAT - A perusal of the Memorandum explaining the insertion of provision relating to insertion of clause (c) to sec. 200A clarifies the intention of the legislature in inserting the said provision. The Finance Bill further clearly provides that the amendment took effect from 01.06.2015, so there is no indication whatsoever that clause (c) of section 200A is retrospective or clarificatory in nature. AO is not empowered to levy late fees u/s. 234E before 01.06.2015. Therefore, in the light of the aforesaid discussion and the ratio laid by the Pune Bench in Maharastra Cricket Association Ors. ( 2016 (10) TMI 104 - ITAT PUNE ) we hold that the amendment clause (c) was inserted u/s. 200A which has been given effect from 01.06.2015 is prospective in nature, and no computation of late fee for the demand or the intimation for the late fee u/s. 234E could be made for the TDS deducted for the respective assessment years prior to 01.06.2015. The intimation u/s. 200A by the AO, TDS for payment of late fee u/s. 234E of the Act for the respective assessment years prior to 01.06.2015 is without any authority of law. We set aside the order of the CIT(A) and remand the matter back to the file of AO with a direction to AO that the late fee levied for the period of delay of filing return prior to 01.06.2015 need to be deleted. - Decided in favour of assessee.
Issues Involved:
1. Constitutional Validity of Section 234E of the Income-tax Act, 1961 2. Authority of Assessing Officer (AO) to Levy Late Fees under Section 234E Prior to 01.06.2015 3. Maintainability of Appeals Against Intimations Issued Under Section 200A Detailed Analysis: 1. Constitutional Validity of Section 234E of the Income-tax Act, 1961: The constitutional validity of Section 234E, which imposes fees for late filing of TDS statements, was upheld by the Hon’ble Bombay High Court in Rashmikant Kundalia & Ors. Vs. Union of India & Ors. (2015). The court ruled that the fees under Section 234E are compensatory and not punitive, thus not violating constitutional provisions. This was further supported by the Hon’ble Rajasthan High Court in Dundlod Shikshan Sansthan Vs. Union of India (2016). 2. Authority of Assessing Officer (AO) to Levy Late Fees under Section 234E Prior to 01.06.2015: The key issue was whether the AO could levy late fees under Section 234E for periods before the amendment to Section 200A(1) of the Act, effective from 01.06.2015. The Tribunal referred to the case of Maharashtra Cricket Association & Ors. Vs. DCIT (2016), which clarified that prior to the amendment, the AO lacked the authority to levy such fees. The Tribunal concluded that the amendment enabling the AO to levy fees under Section 234E was prospective and not retrospective. Therefore, any intimation issued under Section 200A for periods before 01.06.2015, demanding late fees under Section 234E, was without authority and invalid. 3. Maintainability of Appeals Against Intimations Issued Under Section 200A: The Tribunal examined whether appeals against intimations issued under Section 200A, which included demands for late fees under Section 234E, were maintainable. It was held that such intimations are indeed appealable under Section 246A of the Act. The Tribunal cited the Memorandum explaining the Finance Bill, 2015, which recognized that intimations generated after processing TDS statements are subject to rectification under Section 154, appealable under Section 246A, and deemed as notice of payment under Section 156. Consequently, the Tribunal reversed the CIT(A)'s decision and admitted the appeals. Conclusion: The Tribunal concluded that: - The AO did not have the authority to levy late fees under Section 234E for periods prior to 01.06.2015. - Such levies made before the amendment were invalid and should be deleted. - Appeals against such intimations are maintainable. The Tribunal directed the AO to delete the late fees levied for periods before 01.06.2015 and upheld the fees for periods starting from 01.06.2015 to the date of actual filing of the TDS return. The appeals filed by the assessees were allowed accordingly.
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