2024 (10) TMI 1480 - HC - Income Tax

Validity of the Section 234E - processing TDS statements u/s 200A - HELD THAT - In the present case, the respondent had imposed the late fee only u/s 234E of the Act. 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 under Section 200A the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS u/s 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. Decided in favour of assessee.

Summary

Issues:
Challenge to Demand Intimation Letters dated 03.10.2016 imposing late fee under Section 234E of the Act while processing TDS statements under Section 200A for assessment years 2012-13, 2013-14, and 2014-15.

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 for specific assessment years. The Court referred to a previous judgment where it was established that late fees could be imposed under Section 234E but not during the processing of TDS under Section 200A. The introduction of Section 200A(1)(c) was highlighted, emphasizing that it enabled the computation of late fees under Section 234E during TDS statement processing. However, this provision was effective only from 01.06.2015, post the relevant assessment years in question.

The Court noted that late fees were imposed under Section 234E without the existence of provisions under Section 200A during the assessment years in question. It was emphasized that the retrospective application of Section 200A(1)(c) was not valid. The judgment highlighted that the authorities were not empowered to impose late fees while processing TDS statements under Section 200A before the introduction of Section 200A(1)(c). The Court rejected the argument for retrospective application of late fees under Section 200A(1)(c) and set aside the Demand Intimation Letters for the specified assessment years.

The respondent's claim that only the Commissioner of Income Tax could waive late fees under Section 264C was acknowledged. The Court clarified that late fees were imposed solely under Section 234E for the relevant assessment years, where Section 200A was not in effect. Consequently, the Court set aside the impugned orders and directed the Department to consider the petitioner's reply as a revision application, ensuring appropriate consideration within eight weeks.

In conclusion, the Court set aside the Demand Intimation Letters dated 03.10.2016, ruling in favor of the petitioner due to the absence of provisions under Section 200A during the assessment years in question. The Writ Petition was disposed of with no costs incurred.