2025 (1) TMI 1183 - AT - Income Tax

Late fee levied u/s.234E - delay in filing the TDS quarterly returns - HED THAT - Late fee u/s.234E has been imposed for the delay in furnishing the statements for quarters in the returns processed u/s.200A of the Act prior to 01.06.2015 and post 01.06.2015. As regards the fate of fees levied u/s.234E of the Act for the returns filed and processed before 01.06.2015 we find the Coordinate Benches of this Tribunal after considering the judicial pronouncements have been taking a consistent view that the amendment brought in Finance Act 2015 w.e.f. 01.06.2015 under Section 200A (clause (c) of the Act is prospective in nature thereby empowering the Revenue authorities to charge fee u/s.234E of the Act only after 01.06.2015. In that view of the matter Revenue authorities are empowered to impose such late fee u/s.234E only for the default committed after 01.06.2015 and not prior to that. Late fee u/s.234E has been imposed for the delay in furnishing the statements and the returns have been processed u/s.200A of the Act after 01.06.2015 - Penalty u/s.234E is leviable since amendment brought in Finance Act 2015 w.e.f. 01.06.2015 under Section 200A (clause (c) of the Act is prospective in nature and Revenue authorities are empowered to levy penalty u/s.234E. However penalty u/s.234E has to be computed from 01.06.2015 till the processing of the return for which necessary calculation to be made at the end of the concerned Revenue authority.

ISSUES PRESENTED and CONSIDERED

The core legal issue in these appeals is the imposition of interest under Section 234E of the Income-tax Act, 1961, for the late filing of TDS returns for various quarters in the assessment years 2013-14, 2014-15, 2015-16, and 2016-17. The Tribunal considered whether the levy of fees under Section 234E by the Central Processing Cell (CPC) for returns processed under Section 200A before and after the amendment effective from June 1, 2015, was justified.

ISSUE-WISE DETAILED ANALYSIS

1. Levy of Fee under Section 234E for Returns Processed Before June 1, 2015

Relevant Legal Framework and Precedents: The amendment to Section 200A by the Finance Act, 2015, effective from June 1, 2015, introduced clause (c), which empowered the Revenue authorities to levy fees under Section 234E for late filing of TDS statements. Prior to this amendment, there was no explicit provision under Section 200A for such a levy.

Court's Interpretation and Reasoning: The Tribunal observed that the amendment is prospective in nature. Therefore, fees under Section 234E could not be imposed for defaults committed before June 1, 2015. This interpretation aligns with several judicial pronouncements, including decisions by the Kerala High Court.

Key Evidence and Findings: The Tribunal noted that the returns in question were processed before June 1, 2015, and thus, the levy of fees was not supported by the statutory framework applicable at that time.

Application of Law to Facts: Applying the prospective nature of the amendment, the Tribunal concluded that the fees imposed for periods prior to June 1, 2015, were not legally sustainable.

Treatment of Competing Arguments: The Tribunal acknowledged the Departmental Representative's support for the lower authorities' orders but relied on established precedents to overturn the fees for periods before the amendment.

Conclusions: The Tribunal allowed the appeals for returns processed before June 1, 2015, and overturned the orders imposing fees under Section 234E.

2. Levy of Fee under Section 234E for Returns Processed After June 1, 2015

Relevant Legal Framework and Precedents: Post-amendment, Section 200A explicitly allows for the levy of fees under Section 234E for late filing of TDS statements.

Court's Interpretation and Reasoning: The Tribunal held that the amendment clearly empowered the Revenue authorities to levy fees for defaults occurring after June 1, 2015.

Key Evidence and Findings: The Tribunal identified returns processed after the amendment date and confirmed the applicability of Section 234E fees.

Application of Law to Facts: The Tribunal applied the amended legal framework to affirm the fees imposed for returns processed after June 1, 2015.

Treatment of Competing Arguments: The Tribunal did not find any compelling arguments against the imposition of fees post-amendment, given the clear statutory authority.

Conclusions: The Tribunal upheld the imposition of fees under Section 234E for returns processed after June 1, 2015, but directed the Revenue authorities to compute the penalty from the amendment date to the processing date.

SIGNIFICANT HOLDINGS

Core Principles Established: The Tribunal reaffirmed the principle that statutory amendments are generally prospective unless explicitly stated otherwise. The amendment to Section 200A was prospective, affecting only returns processed after June 1, 2015.

Final Determinations on Each Issue: The Tribunal allowed the appeals concerning returns processed before June 1, 2015, and partly allowed appeals for returns processed after that date, affirming the fees but requiring precise computation from the amendment date.

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