2020 (7) TMI 34 - AT - Income Tax

Levy of late fee u/s 234E - intimation u/s 200A - delay in filing quarterly statement - HELD THAT - In case, there is a default or delay in submitting the TDS statements, a late fee is levied as contemplated U/s 234E of the Act and the A.O. while processing the statements of TDS shall make the adjustment on this account . In the present case we do not find any substance or merit in this appeal as the delay in filing the quarterly statement is accepted by the assessee. The only plea raised by the assessee before the ld. CIT(A) as well as before us is the explanation for such delay in filing quarterly statement. However, since the levy of late fee as prescribed U/s 234E of the Act is mandatory and consequential, therefore, the same cannot be deleted on the ground of reasonable cause as explained by the assessee. Though the intimation issued U/s 200A of the Act is an appealable order, however, the said order can be challenged only on the ground that the adjustment made by the A.O. or intimation issued U/s 200A of the Act is not in accordance with the provisions of Section 234E or Section 200A of the Act. Only if the A.O. has failed to comply with the mandatory provisions of these Sections while making the adjustment and issuing the intimation, the same can be challenged in the appeal. In absence of any such allegation that the A.O. has violated any of the provisions of Section 234E or Section 200A of the Act, the adjustment made by the A.O. on account of late filing fee U/s 234E of the Act cannot be deleted.- Decided against assessee.

Issues Involved:
1. Sustaining the levy of penalty under Section 234E of the Income Tax Act, 1961.
2. Consideration of reasonable cause for delay in filing TDS statements.
3. Legality of late fee recovery under Section 234E through intimation under Section 200A.
4. The impact of financial hardship on the imposition of late fees.
5. Interpretation of Section 200A and its applicability to late fee imposition.
6. The scope of appeal against intimation issued under Section 200A.

Detailed Analysis:

1. Sustaining the Levy of Penalty under Section 234E:
The primary issue is whether the Commissioner of Income Tax (Appeals) erred in sustaining the levy of penalty under Section 234E. The appellant argued that the penalty was imposed without considering the bona fide explanation and sufficient cause for the delay. The Tribunal upheld the penalty, emphasizing that the levy under Section 234E is mandatory and consequential, thus not subject to discretion based on reasonable cause.

2. Consideration of Reasonable Cause for Delay in Filing TDS Statements:
The appellant contended that the delay in filing the quarterly TDS statement was due to unavoidable circumstances, such as staff shortages and involvement in other public interest activities. Despite these explanations, the Tribunal held that the mandatory nature of Section 234E does not allow for the deletion of the late fee based on reasonable cause. The Tribunal noted that the delay of 315 days in filing the TDS statement was admitted by the appellant, and thus, the levy was justified.

3. Legality of Late Fee Recovery under Section 234E through Intimation under Section 200A:
The appellant argued that the late fee should have been deposited at the time of delivering the TDS statement and not later through intimation under Section 200A. The Tribunal clarified that Section 200A allows for the processing of TDS statements and the computation of fees under Section 234E. Therefore, the recovery of late fees through intimation is legal and in accordance with the provisions of the Act.

4. The Impact of Financial Hardship on the Imposition of Late Fees:
The appellant claimed that the imposition of late fees would cause genuine hardship as the funds are allocated for public education projects. The Tribunal, however, maintained that financial hardship does not exempt the appellant from the mandatory levy under Section 234E. The Tribunal emphasized that the nature of the levy is such that it does not consider the financial condition of the deductor.

5. Interpretation of Section 200A and Its Applicability to Late Fee Imposition:
The Tribunal examined Section 200A, which outlines the processing of TDS statements and the adjustments to be made, including the computation of fees under Section 234E. The Tribunal reiterated that the Assessing Officer (A.O.) is required to make these adjustments mandatorily, and there is no discretion involved. The Tribunal found that the A.O. acted within the legal framework by imposing the late fee.

6. The Scope of Appeal Against Intimation Issued under Section 200A:
The Tribunal noted that an intimation issued under Section 200A is appealable only if it violates the provisions of Section 234E or Section 200A. In this case, the appellant did not allege any such violation. Therefore, the Tribunal concluded that the adjustment made by the A.O. was in accordance with the law, and the appeal lacked merit.

Conclusion:
The Tribunal dismissed the appeal, upholding the orders of the lower authorities. The Tribunal concluded that the levy of late fees under Section 234E is mandatory and cannot be waived based on reasonable cause or financial hardship. The processing of TDS statements and the imposition of late fees through intimation under Section 200A were deemed legal and in compliance with the Income Tax Act.

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