2022 (8) TMI 571 - AT - Income Tax

Late fee levied u/s.234E - assessee has filed TDS Quarterly returns in Form 24Q beyond due date specified under the Act - HELD THAT - In this case, for the AY 2013-14, the quarterly return filed by the assessee and order passed by the Assessing Officer are on or before 01.06.2015 and thus, there cannot be any late fees for filing return u/s.234E of the Act, and hence, addition made for the AY 2013-14 is deleted. For the AY 2014-15, the assessee has filed Form 26Q for 3rd quarter of FY 2013-14 after 01.06.2015 and the CPC (TDS) has processed the return filed by the assessee after 01.06.2015 and thus, late fees provided u/s.234E can be levied and thus, late fees levied for delay in filing Form 26Q for the 3rd quarter alone is sustained. As far as other returns filed by the assessee for the FY 2013-14 relevant to the AY 2014- 15, all returns were filed and processed before 01.06.2015 and thus, the Assessing Officer cannot levy late fees u/s.234E of the Act and thus, late fees filed for the AY 2014-15 except Form 26Q for 3rd quarter, is deleted. As regards, quarterly return filed for the AY 2015-16, the assessee has filed all returns on or after 01.06.2015 and the CPC(TDS) had also processed the returns filed by the assessee on or after 01.06.2015 and thus, the Assessing Officer can levy late fees u/s.234E of the Act and thus, late fees levied by the Assessing Officer u/s.234E of the Act, for the AY 2015-16, is confirmed.

Summary

Issues:
Delay in filing appeals due to Covid-19 lockdown, condonation of delay, levy of late filing fee under section 234E of the Income Tax Act, 1961, validity of late fee levy under section 234E for TDS returns filed prior to 01.06.2015, interpretation of provisions of section 200A and section 234E, applicability of judgments by High Courts on late fee levy.

Analysis:
The appeals were filed against orders by the Commissioner of Income Tax (Appeals) related to assessment years 2013-14 to 2015-16. The delay of 249 days in filing appeals was attributed to the Covid-19 lockdown, which was condoned considering the general exemption provided by the Hon'ble Supreme Court. The issue of late filing fee under section 234E arose due to TDS quarterly returns filed beyond the specified due date. The Assessing Officer had imposed late filing fees under section 234E, which was challenged by the assessee before the CIT(A).

The key issue was whether the Assessing Officer could levy late fees under section 234E for TDS returns filed before 01.06.2015. The Finance Act introduced section 234E, enabling the levy of late fees for belated filing of quarterly returns by tax deductors. Various High Courts' judgments, including the Karnataka and Kerala High Courts, emphasized the need for an enabling provision in section 200A to compute late fees under section 234E. The Tribunal also held that late fees under section 234E could not be imposed for periods before 01.06.2015 when there was no enabling provision.

For the assessment years in question, the Tribunal ruled differently based on the timing of the returns filed. Late fees for the AY 2013-14 were deleted as the return and order were before 01.06.2015. Late fees for the AY 2014-15 were upheld for the 3rd quarter return filed after 01.06.2015. Late fees for the AY 2015-16 were confirmed as all returns were filed after 01.06.2015. Consequently, the appeals for the AY 2013-14 were allowed, partly allowed for AY 2014-15, and dismissed for AY 2015-16, with the stay applications being deemed infructuous.