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2022 (10) TMI 485 - AT - Income TaxLevy of late fees u/s 234E - belated submission of Tax Deducted at Source statements - HELD THAT - It is with effect from 01-06-2015 that an amendment was made to section 200A of the Act providing that fees u/s 234E could be computed at the time of processing of return of income and an intimation could be issued specifying the sum payable by the deductor as fees u/s 234E of the Act. Hon'ble Karnataka High Court in the case Fatheraj Singhvi Vs. Union of India 2016 (9) TMI 964 - KARNATAKA HIGH COURT has held that the provisions of section 234E of the Act are substantive in nature and the mechanism for computing the late fee was provided by the Parliament only w.e.f. 01-06-2015. Therefore, late fees u/s 234E of the Act can be levied only prospectively w.e.f. 01-06-2015 and not prior to that. Admittedly in all the above eight cases, the Revenue has levied such late fee u/s 234E for F.Y. 2012-13, 2013-14 and 2014-15 which are for the periods prior to 01-06-2015 and hence, we set aside the concerned orders of the National Faceless Appeal Centre and direct the A.O to delete the late fees levied u/s 234E of the Act from the hands of the assessee.Appeal of the assessee allowed.
Issues Involved:
1. Levy of late fees under Section 234E of the Income-tax Act, 1961 for periods prior to June 1, 2015. 2. Condonation of delay in filing appeals before the Commissioner of Income Tax (Appeals) [CIT(A)]. Detailed Analysis: 1. Levy of Late Fees Under Section 234E: The primary issue in these appeals concerns the levy of late fees under Section 234E of the Income-tax Act, 1961. The Tribunal noted that the power to levy such fees was not available to the Department prior to June 1, 2015. The relevant financial years in question were 2012-13, 2013-14, and 2014-15, and the late fees were levied before June 1, 2015. The Tribunal referred to the case of Nisar Mehboob Alam Khan and others, where it was held that the late fee under Section 234E could only be levied prospectively from June 1, 2015, following the Karnataka High Court's decision in Fatheraj Singhvi vs. Union of India. The Tribunal reiterated that the amendment to Section 200A, which provided the mechanism for levying late fees under Section 234E, came into effect only from June 1, 2015. Therefore, any late fees levied for periods prior to this date were without legal mandate. 2. Condonation of Delay in Filing Appeals: The Tribunal also addressed the issue of condonation of delay in filing appeals before the CIT(A). It emphasized that the appellant had a strong case on merits and that the delay should be condoned to ensure substantial justice. The Tribunal referred to the Supreme Court's decision in Collector Land Acquisition vs. Mst. Katiji, which highlighted that refusing to condone delay could result in a meritorious matter being thrown out, and that substantial justice should be preferred over technical considerations. The Tribunal also cited the Bombay High Court's decision in Vijay Vishin Meghani vs. DCIT, which held that an overall view in the larger interest of justice should be taken when considering condonation of delay. The Telangana High Court's decision in Thunuguntla Jagan Mohan Rao vs. DCIT was also referenced, which emphasized that rules of limitation should not destroy the rights of parties and that delays should be condoned if they are not deliberate or part of a dilatory strategy. Conclusion: The Tribunal concluded that the late fees under Section 234E could not be levied for periods prior to June 1, 2015, and directed the Assessing Officer to delete the late fees levied for the financial years 2012-13, 2013-14, and 2014-15. The Tribunal allowed the appeals of the assessee, setting aside the orders of the National Faceless Appeal Centre. Order Pronouncement: The order was pronounced in the open Court on October 11, 2022, allowing all the appeals of the assessee.
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