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2020 (12) TMI 331 - AT - Income TaxLate fees payable under section 234E - Intimation issued u/s 200A and/or order passed u/s 154 - charging of fees payable under section 234E of the Act prior to amendment to section 200A(1)(c) of the Act vide Finance Act, 2015 w.e.f. 01.06.2015, while processing the TDS returns - Whether where the return for the TDS deduction was filed under respective sections of the Act, for the period prior to 01.06.2015 though belatedly, but no late filing fee can be charged under section 234E - HELD THAT - The machinery provisions of charging the said fee as per clause (c) of Section 200A(1) of the Act was inserted by legislature with effect from 01.06.2015. We find that the said issue has been decided in the case of Fateh Raj Singhvi Ors. vs UOI 2016 (9) TMI 964 - KARNATAKA HIGH COURT and it is held that section 200A of the Act inserted with effect from 01.06.2015 had prospective effect and was not applicable for different quarters of assessment years prior to 01.06.2015. Where power is being enshrined upon the Assessing Officer to charge late fees while processing the TDS returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of tax payer. The provision under which a new enabling power is being given to charge fees under section 234E of the Act while processing TDS returns / statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E - intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law. - Decided in favour of assessee.
Issues Involved:
1. Delay in filing appeals before the CIT(A). 2. Charging of late fees under Section 234E of the Income-tax Act, 1961 for periods prior to the amendment effective from 01.06.2015. 3. Validity of intimation issued under Section 200A for charging late fees. 4. Applicability of the amendment to Section 200A(1)(c) effective from 01.06.2015. Issue-wise Detailed Analysis: 1. Delay in Filing Appeals Before the CIT(A): The CIT(A) dismissed the appeals due to the delay in filing. The appeals were against orders passed under Section 154 of the Act, dated 09.04.2018, except for the appeals relating to Assessment Year 2015-16, which were filed in time. The appeals were filed before the CIT(A) in March 2019, resulting in a delay of less than a year. The Tribunal deemed it fit to condone this delay, emphasizing that the appeals were not against the original intimation but against the order passed under Section 154. 2. Charging of Late Fees Under Section 234E for Periods Prior to 01.06.2015: The primary issue was whether late fees under Section 234E could be charged for TDS statements filed for periods before 01.06.2015. The Tribunal noted that the amendment to Section 200A(1)(c) effective from 01.06.2015 was not retrospective. The Tribunal referred to the Karnataka High Court's decision in Fateh Raj Singhvi & Ors. vs UOI, which held that the amendment was prospective and not applicable to periods prior to 01.06.2015. Consequently, late fees under Section 234E could not be levied for periods before the amendment. 3. Validity of Intimation Issued Under Section 200A for Charging Late Fees: The Tribunal examined whether the intimation issued under Section 200A for charging late fees under Section 234E was valid. It was established that the machinery provisions for charging such fees were inserted only with effect from 01.06.2015. Therefore, any intimation issued for periods before this date was not valid. The Tribunal referenced multiple decisions, including those of the Delhi Tribunal and the Pune Bench, which consistently held that the Assessing Officer was not empowered to charge late fees under Section 234E for periods prior to 01.06.2015. 4. Applicability of the Amendment to Section 200A(1)(c) Effective from 01.06.2015: The Tribunal analyzed whether the amendment to Section 200A(1)(c) was clarificatory or prospective. The Tribunal concluded that the amendment was prospective, as it provided new enabling powers to the Assessing Officer to charge late fees. The Tribunal cited the Supreme Court's decision in CIT vs. Vatika Township Pvt. Ltd., which stated that legislation is presumed to be prospective unless explicitly stated otherwise. The Tribunal also referred to the explanatory memorandum to the Finance Bill, 2015, which clarified that the amendment was intended to be prospective. Conclusion: The Tribunal allowed the appeals, holding that late fees under Section 234E could not be charged for periods prior to 01.06.2015. The intimation issued under Section 200A for such periods was deemed invalid. The amendment to Section 200A(1)(c) was held to be prospective, and the appeals were allowed on these grounds. The Tribunal's decision was consistent with the principles laid down by various High Courts and the Supreme Court.
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