2021 (4) TMI 330 - AT - Income Tax

Penalty u/s 234E - Late fee for filing the TDS Returns - assessee is a charitable trust runs its educational institution / school affiliated to CBSE Board ad the assessee trust is also registered under the Bombay Public Trusts Act, 1950 and is also granted registration under section 12A - whether or not the Assessing Officer could charge late fee under provisions of section 234 E of the Act, where admittedly 1st quarterly TDS returns filed by assessee was delayed? - HELD THAT - Identical issue arose before the Co ordinate Bench of the Tribunal, Mumbai E Bench, Mumbai, in a group of cases EMSONS EXIM PVT. LTD. VERSUS INCOME TAX OFFICER (TDS) WARD-1 (2) (3) , MUMBAI 2019 (8) TMI 1461 - ITAT MUMBAI wherein the Co ordinate Bench followed the majority view expressed by the Third Member by observing that the fee under section 234E of the Act can only be charged in respect of delay in filing the statement of TDS for the period after 1st June 2015. Although, the fact remains that the assessee is defaulted in filing the TDS return belatedly prior to 1st June 2015. Since the issue raised in the present case is squarely covered by the aforesaid ratio laid down by the Co ordinate Tribunal, Mumbai Bench, respectfully following the same, we hold that the authorities below were not justified in levying penalty and the interest thereon. Since the default committed by the assessee is prior to 1st June 2015, the Assessing Officer is not empowered to charge fees under section 234E of the Act by way of intimation issued under section 200A of the Act - Decided in favour of assessee.

Summary

Issues:
Whether the authorities were justified in levying late filing fees under section 234E of the Income Tax Act, 1961.

Analysis:
The appeal was filed by the assessee challenging the order passed by the Commissioner (Appeals) for the assessment year 2015-16. The grounds of appeal included challenges to penalties imposed under section 234E and interest on late payment and interest under section 220(2). The Assessing Officer had imposed penalties and interest for late filing of TDS returns for each quarter of the assessment year. The Commissioner (Appeals) upheld the penalties, stating that the provisions of section 234E were applicable as the returns were filed belatedly. The issue to be decided was whether the Assessing Officer was justified in charging late fees under section 234E for delayed quarterly TDS returns.

The assessee, a charitable trust, argued that there was no enabling provision under section 200A to determine fees under section 234E prior to 1st June 2016. The trust sought the deletion of penalties and interest for the assessment year 2015-16. The Departmental Representative supported the decisions of the Assessing Officer and the Commissioner (Appeals). The Tribunal considered the precedent set by a Co-ordinate Bench in a similar case, where it was held that fees under section 234E could only be charged for delays after 1st June 2015. Since the assessee's defaults occurred before this date, the Assessing Officer was not empowered to levy penalties under section 234E. Accordingly, the Tribunal set aside the penalties and interest imposed, directing the Assessing Officer to recompute the TDS return as per law. The appeal was allowed, and the order was pronounced on 22nd February 2021.