2022 (11) TMI 1051 - AT - Income Tax

Levy of late fees u/s 234E - intimation issued u/s 200A of the Act on processing of Statement of Tax Deducted at Source - HELD THAT - As decided in K.D. Realities Pvt. Ltd. 2019 (11) TMI 1762 - ITAT MUMBAI deleted the late fee levied under Section 234E of the Act in respect of the quarterly TDS statements filed for the financial years relevant to Assessment Years 2013-14 to 2015-16 holding that the Hon ble High Court of Karnataka in the case of Fatehraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT had concluded, that the notice under Sec.200A of the Act for computing late fee under Section 234E of the Act, to the extent the same related to the period of the tax deduction prior to 01.06.2015 was liable to be set aside. Also see NATIONAL LAMINATE CORPORATION VERSUS ITO-CPC (TDS) UTTAR PRADESH 2019 (12) TMI 574 - ITAT MUMBAI Thus we delete levy of late fees for Assessment Year 2013-14, demanded under Section 234E of the Act. Ground No. 1 raised in the appeal is allowed.

Issues Involved:
1. Levy of fee under Section 234E of the Income Tax Act, 1961 for late filing of TDS statements for the financial years relevant to Assessment Years 2013-14, 2014-15, and 2015-16.

Issue-Wise Detailed Analysis:

1. Levy of Fee under Section 234E of the Income Tax Act, 1961:

Background:
The appeals were filed by the Assessee against the orders of the Commissioner of Income Tax (Appeals)-National Faceless Appeals Centre (CIT(A)), which dismissed the appeals challenging the levy of late fees under Section 234E of the Act. The late fees were imposed through intimation issued under Section 200A of the Act on processing of TDS statements for the quarters of the financial years relevant to the Assessment Years 2013-14, 2014-15, and 2015-16.

Arguments from the Appellant:
The Appellant contended that the levy of late fees under Section 234E prior to 01.06.2015 is not tenable. The Appellant relied on several judgments, including:
- Fatehraj Singhvi vs. UOI (2016) 289 CTR (Kar) 602
- Medical Superintendent Rural Hospital vs. DCIT (2018) 173 ITD 575 (Pune-ITAT)
- K.D. Realities Pvt. Ltd. vs. CIT (2019) SCC OnLine ITAT 21609
- Permanent Magnets Ltd. vs. CIT (2019) SCC OnLine ITAT 20844
- Udit Jain vs. CIT (2019) SCC OnLine ITAT 23001

Arguments from the Respondent:
The Departmental Representative relied on the CIT(A) order and the judgment of the Hon'ble Gujarat High Court in Rajesh Kourani Vs. Union of India [2017] 297 CTR 502 (Gujarat).

Tribunal's Analysis:
The Tribunal considered the rival submissions and the material on record. It referred to the judgment of the Karnataka High Court in the case of Fatheraj Singhvi Vs. Union of India, which held that the amendment to Section 200A of the Act w.e.f. 01.06.2015 has prospective effect and is not applicable for the period prior to 01.06.2015. The Tribunal noted that the Hon'ble High Court of Karnataka had concluded that the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made for the period prior to 01.06.2015.

Tribunal's Decision:
1. Assessment Year 2013-14: The Tribunal deleted the levy of late fees of INR 40,000/- for Assessment Year 2013-14, demanded under Section 234E of the Act, following the judgment of the Karnataka High Court and other similar decisions by various benches of the Tribunal.
2. Assessment Year 2014-15: The Tribunal deleted the late fees of INR 2,00,855/- for Assessment Year 2014-15, demanded under Section 234E of the Act, based on the same reasoning.
3. Assessment Year 2015-16: The Tribunal deleted the late fees of INR 2,08,050/- for Assessment Year 2015-16, demanded under Section 234E of the Act, following the same rationale.

Conclusion:
The Tribunal allowed all three appeals filed by the Assessee, deleting the late fees levied under Section 234E of the Act for the Assessment Years 2013-14, 2014-15, and 2015-16, as the levy was not maintainable for the period prior to 01.06.2015. The order was pronounced on 14.10.2022.

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