2016 (2) TMI 403 - AT - Income Tax

Tribunal overturns fees for late TDS payment, citing legal interpretation.

Kanak Castor Products P. Ltd. Versus DCIT, Centralised Processing Cell-TDS, Ghaziabad

The Tribunal ruled in favor of the appellant, overturning the levy of fees under section 234E for late payment of TDS and late submission of forms for the ... Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that:- We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. 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 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee. Issues:- Appeals challenging levy of fee for late payment of TDS and late submission of forms for the assessment year 2013-14.- Interpretation of provisions under section 234E of the Income Tax Act.- Comparison with relevant judicial precedents.- Application of legal principles to determine the validity of the fee levied.Analysis:1. The appeals were filed against the levy of fees on late payment of TDS and late submission of forms for the assessment year 2013-14. The issue revolved around the imposition of a fee of Rs. 9,000 under section 234E for late submission of Form No.24QQ4 and Form No.26Q-Q4. The appellant contended that the issue was covered in their favor by a previous ITAT order in a similar case.2. The Tribunal referred to the provisions of section 234E of the Income Tax Act, which imposes a fee for defaults in furnishing statements related to tax deductions. The Tribunal analyzed the legal position and considered the precedents set by other High Courts. It was noted that the law prior to June 1, 2015, did not provide for the computation of fees under section 234E during the processing of TDS statements. The Tribunal emphasized that the adjustment for levy of fees under section 234E was beyond the scope of permissible adjustments under section 200A.3. The Tribunal highlighted the amendment made by the Finance Act 2015, effective from June 1, 2015, which allowed for the computation of fees under section 234E during the processing of TDS statements. However, the impugned order was issued before this amendment. The Tribunal concluded that the levy of late filing fees under section 234E in the impugned intimation was unsustainable in law. Therefore, the Tribunal deleted the levy of fees under section 234E for the appellant.4. Relying on the precedent set by the Tribunal in a similar case, the Tribunal allowed the appeals of the appellant and deleted the fee of Rs. 9,000 imposed in each appeal. The Tribunal pronounced the order in favor of the appellant, providing relief by removing the levy of late filing fees under section 234E. The decision was based on the legal interpretation of the relevant provisions and the comparison with established judicial precedents.In conclusion, the Tribunal's judgment favored the appellant by ruling against the levy of fees under section 234E for late payment of TDS and late submission of forms, citing legal provisions and judicial precedents to support its decision.