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TMI Blog2015 (10) TMI 2541X X X X Extracts X X X X X X X X Extracts X X X X ..... llenging the levy of fees under section 234E of the Income Tax Act. 2. The issue is common in all the appeals, therefore, all appeals were heard together and we dispose of the same through this common consolidated order. 3. Briefly the facts of the case are that these appeals are against intimation under section 200A of the Income Tax Act, whereby late filing fee under section 234E has been levied and the only effective ground of appeal taken in all the appeals are against charging of late fees under section 234E of the Act. The assessee contended before ld. CIT(Appeals) that the intimation was passed without providing any opportunity of being heard because the tax was deposited in time and late filing was only on technical error resulting in no loss to the revenue and fee can be recovered only at the time of filing return. It was also submitted that the impugned returns were late due to Accountant's fault. It was also contended that fees under section 234E can be recovered at the time of filing of the return and not thereafter. 4. The ld. CIT(Appeals), considering the submissions of the assessee noted that in all the intimations under section 200A of the Act, late fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (T-IT), Hon'ble Rajasthan High Court in the case of Om Prakash Dhoot Vs Union of India [WP No. 1981 of 2014] and of Hon'ble Bombay High Court in the case of Rashmikant Kundalia Vs Union of India [WP No. 771 of 2014] , granting stay on the demands raised in respect of fees under section 234E. The full text of these decisions were not produced before us. However, as admittedly there are no orders from the Hon'ble Courts above retraining us from our adjudication on merits in respect of the issues in this appeal, and as, in our humble understanding, this appeal requires adjudication on a very short legal issue, within a narrow compass of material facts, we are proceeding to dispose of this appeal on merits. 5. We may produce, for ready reference, section 234E of the Act, which was inserted by the Finance Act 2012 and was brought into effect from 1st July 2012. This statutory provision is as follows: 234E. Fee for defaults in furnishing statements (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub section (3) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial year in which the statement is filed. Explanation : For the purposes of this sub-section, an incorrect claim apparent from any information in the statement shall mean a claim, on the basis of an entry, in the statement-- (1) of an item, which is inconsistent with another entry of the same or some other item in such statement; (iii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act; (2) For the purposes of processing of statements under sub- section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub section. 7. By way of Finance Act 2015, and with effect from 1 st June 2015, there is an amendment in Section 200A and this amendment, as stated in the Finance Act 2015, is as follows: In section 200A of the Income-tax Act, in sub- section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from the 1st day of June, 2015, namely:-- (c) the fee, if any, shall be computed in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after making the following adjustments, namely:- (i) any arithmetical error in the statement ; or (ii) an incorrect claim, apparent from any information in the statement; (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; A bare perusal of the reading of Section 200A makes it clear that while processing TDS statements under section 200A the only adjustments which could be made were on account of any arithmetical error in the statement or any incorrect claim apparent from any information in the statement or the levy of any interest on TDS. No other adjustment could be made while processing the TDS statements under section 200A. The levy of fee under section 234E, in the impugned case was clearly therefore beyond the powers prescribed under section 200A. It is pertinent to point out that by virtue of amendment to section 200A brought about by the Finance Act 2015, with effect from 01/06/2015, the power to levy fees under section 234E has been specifically incorporated under section 200A. Thus prior to 01/06/2015 no fee under section 234E could be levied while processing TDS statements under section 200A. This vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. 10. At this juncture it is imperative to state that the Bench has only adjudicated upon the issue of levy of fee u/s 234E while processing TDS statements u/s 200A and not the levy of fee u/s 234E per se. In fact with respect to the same we concur with the view of Ld. CIT(A) that the same has to be mandatorily levied and cannot be waived. But, prior to 01/06/2015, the AO cannot levy the same while processing TDS statements u/s 200A. The AO can pass a separate order levying such fee. 11. In view of the above discussion we are of the considered view that the AO had exceeded his jurisdiction in levying fee under section 234E while processing the statement under section 200A of the Act and therefore the intimation by the lower authority cannot be sustained in law. However, it is open to the AO to pass a separate order under section 234E levying fee for delay in filing statement under section 200 (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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