2024 (9) TMI 1380 - HC - Income Tax

Validity of the Section 234E - late fee imposed u/s 234E while processing the statement of TDS u/s 200A - HELD THAT - In the present case, the respondent had imposed the late fee only u/s 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015 . Therefore, in the absence of any provisions u/s 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside.

Summary

Issues:
Challenge to Demand Intimation Letters dated 28.03.2019 imposing late fee under Section 234E of the Act while processing TDS statements under Section 200A for assessment years 2012-2013, 2013-2014, and 2014-2015.

Analysis:
The judgment pertains to a Writ Petition challenging Demand Intimation Letters imposing late fees under Section 234E of the Act during the processing of TDS statements under Section 200A. The Court referred to a previous judgment where it was established that the late fee can be imposed under Section 234E but not when processing TDS under Section 200A. Section 200A(1)(c) was introduced to enable the computation of late fees under Section 234E during TDS statement processing. The Court emphasized that prior to the introduction of Section 200A(1)(c), authorities were not empowered to impose late fees under Section 234E while processing TDS statements. The respondent argued for retrospective application of Section 200A(1)(c), but the Court rejected this, stating it was introduced to address the lack of a mechanism for imposing late fees before its enactment.

The respondent claimed they lacked the power to waive late fees, contending only the Commissioner of Income Tax could do so under Section 264C of the Act. The Court held that late fees were imposed solely under Section 234E for the relevant assessment years, as Section 200A(1)(c) was not in force then. Consequently, the Court set aside the impugned Demand Intimation Letters, directing the Department to treat the petitioner's reply as a revision application and pass appropriate orders within eight weeks.

In conclusion, the Court found that late fees imposed under Section 234E during the processing of TDS statements under Section 200A for the specified assessment years were not valid due to the absence of provisions under Section 200A at that time. Therefore, the Demand Intimation Letters were set aside, and the Department was instructed to consider the petitioner's reply as a revision application.