Tribunal: Assessing Officer exceeded authority in levying Section 234E fee pre-2015 amendment.

Smt. G. Indhirani, Salem, RAJAGURU SPINNING MILLS LTD., A. DHAKSHINAMURTHY, PADMA TEXTILES & MURTHY LUNGI COMPANY Versus The Deputy Commissioner of Income Tax, CPC – TDS, TDS – CPC, Uttar Pradesh

Smt. G. Indhirani, Salem, RAJAGURU SPINNING MILLS LTD., A. DHAKSHINAMURTHY, PADMA TEXTILES & MURTHY LUNGI COMPANY Versus The Deputy Commissioner of Income ... Issues:
Levy of fee under Section 234E of the Income-tax Act, 1961 while processing statements filed under Section 200A of the Act.

Analysis:
The judgment dealt with the issue of whether the Assessing Officer had the authority to levy a fee under Section 234E of the Income-tax Act, 1961 while processing statements filed under Section 200A of the Act. The contention put forth by the counsel for the assessees was that prior to 01.06.2015, there was no provision enabling the Assessing Officer to levy such a fee under Section 200A. The counsel argued that the fee had to be paid voluntarily by the assessee before filing the statement under Section 200(3) of the Act, and the assessing authority had no power to levy the fee. The Tribunal analyzed the relevant provisions of the Act and noted that the Parliament, through an amendment in 2015, empowered the Assessing Officer to make adjustments by levying a fee under Section 234E while processing statements under Section 200A, effective from 01.06.2015. Prior to this amendment, there was no provision for such adjustments. The Tribunal concluded that the fee levied by the Assessing Officer under Section 234E while processing the statements was beyond the scope of adjustment provided under Section 200A before the amendment.

The Tribunal also addressed the argument that the language of Section 234E stating the assessee "shall be liable to pay" the fee implied that the assessee had to voluntarily pay the fee, and the Assessing Officer could not levy it. The Tribunal rejected this argument, drawing an analogy with provisions in the Indian Penal Code where the language "shall also be liable to fine" did not prevent the authorities from levying fines. The Tribunal emphasized that the assessing authority could pass a separate order under Section 234E to levy a fee for delay in filing statements under Section 200(3) of the Act before 01.06.2015. However, post the amendment, the Assessing Officer could levy the fee under Section 234E while processing statements under Section 200A. The Tribunal concluded that the Assessing Officer had exceeded jurisdiction by levying the fee under Section 234E during processing and making adjustments under Section 200A. The impugned intimation of the lower authorities levying the fee under Section 234E was held to be unsustainable in law. The Tribunal allowed the appeals filed by the assessees, setting aside the fee levied under Section 234E but upholding other adjustments made by the Assessing Officer in the intimation.

In summary, the judgment clarified that prior to 01.06.2015, the Assessing Officer did not have the authority to levy a fee under Section 234E while processing statements under Section 200A of the Income-tax Act, 1961. Post the amendment in 2015, such adjustments were permissible. The Tribunal emphasized the distinction between voluntary payment by the assessee and the Assessing Officer's authority to levy fees, drawing parallels with provisions in the Indian Penal Code. The Tribunal ruled that the Assessing Officer had exceeded jurisdiction by levying the fee under Section 234E during processing and upheld the appeals of the assessees, setting aside the fee levied under Section 234E while confirming other adjustments made by the Assessing Officer.