ITAT allows appeal, rejects fee under section 234E, providing relief to appellant.

The ITAT allowed the appeal, deleting the impugned levy of fee under section 234E of the Income Tax Act. It held that the adjustment for the levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. The ITAT emphasized that the authority did not have the power to impose a fee under section 234E. The decision was based on a detailed analysis of the legal provisions, amendments, and limitations on adjustments permissible under section 200A, providing relief to the appellant.

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Issues:
Levy of fee under section 234E of the Income Tax Act for failure to submit TDS return for quarter no. 4.

Analysis:
The appellant contested the levy of fee amounting to Rs. 16,504 under section 234E of the Income Tax Act for failure to submit the TDS return for quarter no. 4. The appellant argued that the issue had been extensively considered by the ITAT, Amristar Bench in a similar case. The Co-ordinate Bench held that the adjustment in respect of the levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A. The intimation under section 200A, which was the subject of appeal, did not have an enabling provision for raising a demand in respect of the levy of fees under section 234E before June 1, 2015. The ITAT upheld the appellant's grievance and deleted the impugned levy of fee under section 234E, citing that the levy was unsustainable in law.

The ITAT further emphasized that the DCIT, TDS, CPC did not have the authority under section 200A of the Act to make adjustments by imposing a fee under section 234E. Therefore, the ITAT allowed the appeal of the assessee and deleted the penalty. The judgment highlighted the legal provisions of sections 234E and 200A of the Income Tax Act, the amendments made by the Finance Acts of 2012 and 2015, and the limitations on adjustments permissible under section 200A. The ITAT's decision was based on a thorough examination of the legal provisions and their application to the specific case at hand, ultimately providing relief to the appellant against the levy of fees under section 234E.

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