2024 (10) TMI 1199 - AT - Income Tax

Late fee levied u/s 234E - delay filing statements of tax deduction at source u/s 200/206C r.w.s. 200A/206CB by the deductor/collector - HELD THAT - The pre-amended section 200A of the Act as stood on 31.03.2013 i.e. F.Y. 2012-13 relevant to A.Y. 2013-14 in question, did not permit processing of TDS statement for default in payment of late fee u/s 234E - Hence, late fee charged for belated filing of TDS quarterly return could not be recovered by way of processing u/s 200A of the Act. As in Karnataka Grameen Bank 2023 (2) TMI 78 - ITAT BANGALORE observed that amendment under section 200A providing imposition of fee if under section 234E could be computed at the time of processing of return and issue of intimation had come into effect only from 01.06.2015 and had only prospective effect and therefore, levy of late fee under section 234E would be illegal for statement of TDS in respect of period prior to 01.06.2015. Late fee for TDS quarterly statement under challenge in captioned appeals cannot be recovered by way of processing under section 200A - Therefore, the demand raised with reference to section 234E of the Act cannot be countenanced in terms of the pre-amended provision of S. 200A and hence, requires to be quashed.

Summary

Issues:
Imposition of demand under Section 234E of the Act for late filing of TDS statements prior to 01.06.2015, challenge to the action of the Revenue, applicability of the amendment in S. 200A by Finance Act 2015, dismissal of appeals by CIT(A) on grounds of delay, computation of fee under Section 234E, legal issue of imposing late fee, condonation of delay in filing appeal before CIT(A), adjudication of the issue on merits regarding recovery of late fee under section 234E.

Analysis:

The judgment by the Appellate Tribunal ITAT Delhi, delivered by Shri Pradip Kumar Kedia, Accountant Member, and Shri Yogesh Kumar Us, Judicial Member, pertains to the imposition of demand under Section 234E of the Act on the Assessee for late filing of TDS statements. The appeals challenged the late fee levied under Section 234E for delay in filing statements of tax deduction at source under s. 200/206C read with S. 200A/206CB of the Act. The Assessee contended that the late fee was void ab initio based on judicial precedents.

Upon review, it was found that the TDS statements were filed belatedly beyond the prescribed time frame under section 200(3) or 206C(3). The Assessee argued that the amendment allowing the levy of fee under Section 234E was prospective from 1.6.2015 and did not apply to defaults before that date. The CIT(A) dismissed the appeals as belated without considering the merits, leading to the appeal before the ITAT.

The ITAT analyzed the legal provisions and judicial precedents, concluding that the late fee under Section 234E could not be imposed for defaults prior to 01.06.2015. The amendment in S. 200A by Finance Act 2015 was crucial in computing the fee payable under Section 234E. The ITAT noted that the delay in filing the appeal before the CIT(A) was condoned due to the substantial justice involved.

Further, the ITAT delved into the merits of the issue, highlighting that the pre-amended section 200A did not permit processing of TDS statements for late fee under section 234E. Citing a decision by a Co-ordinate Bench, it was established that the late fee for TDS quarterly statements before 01.06.2015 could not be recovered through processing under section 200A. Consequently, the demands raised under Section 234E were deemed invalid, and the appeals were allowed.

In conclusion, the ITAT quashed the demand under Section 234E and the consequential interest charges, emphasizing the legal provisions and precedents governing the imposition of late fees for late filing of TDS statements.