2021 (3) TMI 408 - AT - Income Tax

Late fee levied u/s 234E - delay in furnishing the tax deducted at source statement - intimation u/s 200A - scope of amendment to section 200A - HELD THAT - Admittedly, the levy of late fees under section 234E has been exercised under section 200A for period prior to 01/06/2015. We note that the amendment to section 200A of the Act came into effect from 01/06/2015 and is held to be prospective in nature and therefore no computation of fee for the demand or intimation for fee under section 234 E could be made for late deposit of TDS for the assessment years prior to 01/06/2015. This view is supported by the decision of Hon ble Karnataka High Court in case of Fatheraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT . Late fee under section 234B cannot be levied for a period up to 01/06/2015. In the present years under consideration, interest u/s 234B is not leviable for asst. year 2013-14 2014-15. However for asst. year 2015-16 the amended provisions would be applicable. In respect of asst. year 2015-16, no interest would be chargeable for the first quarter. We therefore direct Ld.AO to delete the addition made under section 234B of the Act in the hands of assessee for the relevant assessment years under consideration. - Decided in favour of assessee.

Summary

Issues:
Challenge to late fee levied under section 234E for delay in furnishing tax deducted at source statement.

Analysis:
The appellate tribunal heard the appeals filed by the assessee against a common order passed by the Ld.CIT(A)-9, Bangalore for the assessment years 2013-14 to 2015-16. The main issue was the challenge to the late fee levied under section 234E of the Act for delayed submission of the tax deducted at source statement. The assessee argued financial distress as the reason for the delay, citing a lack of income to sustain its business due to a cash crisis during the relevant period. The amendment incorporating the levy of fee under section 234E was discussed, emphasizing that it was not applicable to the relevant assessment years predating the amendment. The Revenue, on the other hand, contended that the TDS payments were made after the insertion of the relevant provision, supporting the orders of the authorities below.

The tribunal carefully considered the submissions from both sides and reviewed the records before it. It noted that the levy of late fees under section 234E was exercised under section 200A for the period before 01/06/2015. Referring to the amendment to section 200A of the Act effective from 01/06/2015, the tribunal held it to be prospective in nature. Citing a decision of the Hon'ble Karnataka High Court, the tribunal emphasized that no computation of fee for the demand or intimation for fee under section 234E could be made for late TDS deposits for assessment years before 01/06/2015. The High Court's decision highlighted the illegality and invalidity of such intimation and demand notices under section 200A for fees under section 234E for the period before 01/06/2015.

Consequently, the tribunal ruled that late fees under section 234E could not be levied for the period up to 01/06/2015. It clarified that for the assessment year 2015-16, the amended provisions would be applicable, but no interest would be chargeable for the first quarter. The tribunal directed the Ld.AO to delete the addition made under section 234B of the Act for the relevant assessment years, as interest under section 234B was not leviable for the years 2013-14 and 2014-15. The grounds raised by the assessee were allowed for the mentioned assessment years, with the appeal being partly allowed for the year 2015-16. The tribunal pronounced the order on 8th March 2021, allowing the appeal filed by the assessee for all years under consideration.