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2019 (9) TMI 757 - AT - Income TaxLevying penalty / late filing fee u/s. 234E - order passed u/s 200A - assessee s contention has been that such a levy of fees cannot be made u/s 234E prior to 1.6.2015, since there was no enabling provision in section 200A for raising a demand in respect of levy of fees u/s 234E - HELD THAT - Section 234E was brought in statute w.e.f. 1.7.2012 which provides for fee for default in furnishing statements where a person fails to deliver or cause to be delivered a statement within the time prescribed under section 200(3) or proviso to sub section (3) of section 206C. Section 234E cannot be read in isolation, because it only prescribes the mode of calculation of the fee and it has to be read with the mechanism and the mode provided for its enforcement, that is, the provision which imposes the fee. The amendment made u/s 200A for levying such fee u/s 234E had only come into effect in 1.6.2015 and it cannot be held to operate retrospective because prior to the amendment there was no computation of fee for demand for the payment of fee u/s 234E which could have been made for TDS deducted for any assessment year prior to 1.6.2015. It is trite law that the provision which imposes fees or tax and imposes any kind of liability cannot be given retrospective effect, especially when statute itself provides its operation from prospective date. No fee can be levied u/s 234E in terms of section 200A, as admittedly the date of filing of TDS statement and date of intimation are much prior to 1.6.2015. Thus, for all the years impugned before us the fee levied u/s 234E is cancelled/deleted. - Decided in favour of assessee.
Issues Involved:
1. Levy of penalty under Section 234E for late filing of TDS statements. 2. Validity of the demand raised under Section 200A for periods prior to 1.6.2015. Issue-Wise Detailed Analysis: 1. Levy of Penalty under Section 234E for Late Filing of TDS Statements: The primary issue revolves around the levy of fees for late filing of TDS statements under Section 234E. The assessee filed TDS statements late for various quarters of the financial years 2012-13 and 2013-14. The Assessing Officer (AO) levied a penalty under Section 234E amounting to ?1,29,600 while processing the statement under Section 200A on 24.9.2014. The assessee contended that such a levy could not be made prior to 1.6.2015, as there was no enabling provision in Section 200A for raising a demand in respect of fees under Section 234E before this date. The Tribunal referenced the amendment brought by the Finance Act 2015, effective from 1.6.2015, which included the computation of fees under Section 234E within the scope of Section 200A. The Tribunal concluded that the levy of fees under Section 234E could not be imposed retrospectively for periods before 1.6.2015, as the amendment was prospective in nature. 2. Validity of the Demand Raised under Section 200A for Periods Prior to 1.6.2015: The Tribunal examined the statutory provisions and amendments to determine the validity of the demand raised under Section 200A for periods before 1.6.2015. Section 200A, inserted w.e.f. 1.4.2010, outlined the processing of TDS statements and adjustments that could be made. The amendment effective from 1.6.2015 included the computation of fees under Section 234E. The Tribunal referred to judgments from higher courts, including the Karnataka High Court in the case of Fatheraj Singhvi v. Union of India, which held that the amendment to Section 200A was prospective and could not be applied retrospectively. The Tribunal reiterated that any demand for fees under Section 234E for periods before 1.6.2015 was without authority and invalid. The Tribunal also referenced its own decision in the case of Meghna Gupta vs. ACIT, which supported the prospective application of the amendment. Conclusion: In light of the above analysis, the Tribunal held that no fees could be levied under Section 234E for the periods before 1.6.2015, as the enabling provision in Section 200A was not in effect during those periods. Consequently, the fees levied for the assessment years in question were cancelled and deleted. The appeals filed by the assessee were allowed, and the demand notices under Section 200A for the computation and intimation of fees under Section 234E for periods prior to 1.6.2015 were set aside as illegal and invalid. The judgment emphasized the prospective nature of the amendment and upheld the principle that statutory provisions imposing fees or liabilities cannot be applied retrospectively unless explicitly stated. Order Pronounced: The Tribunal pronounced the order in the open court on 29th July 2019, allowing all the appeals filed by the assessee.
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