Tribunal Overturns Late Fee for FY 2013-2014

The Tribunal allowed the appeal, setting aside the late fee imposed under section 234E for the 4th Quarter of FY 2013-2014. It held that prior to 01.06.2015, the AO lacked authority to levy fees under section 234E, aligning with the Karnataka High Court's ruling. The decision emphasized that the amendment had prospective effect, rendering any fee demands before the specified date invalid. The late fee was deleted, following the legal interpretation restricting section 234E's application pre-01.06.2015.

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Issues Involved:
Sole issue: Confirmation of late fee u/s.234E for delay in filing quarterly statement.

Analysis:
The appeal was filed against the order of the CIT(A) confirming the late fee levied by the AO under section 234E of the Act for delay in filing the TDS return. The assessee filed the return for the 4th Quarter of FY 2013-2014 on 12th March 2015, which was due on 31st May 2014. The AO imposed a late fee of Rs. 60,200 for a delay of 301 days. The CIT(A) upheld the AO's decision. The AR of the assessee relied on a Tribunal decision in a similar case and argued that section 234E was not applicable before 01.06.2015. The DR agreed that the issue favored the assessee based on the earlier Tribunal decision.

The Tribunal referred to the case of Glee Pharma Pvt. Ltd., where it was held that prior to 01.06.2015, the AO did not have the authority to levy fee u/s 234E while processing statements under section 200A. The Tribunal followed the Karnataka High Court's decision, stating that the AO could only levy fees under section 234E post 01.06.2015. Therefore, the intimation by the lower authorities levying fee under section 234E was deemed unsustainable. Consequently, the late fee levied under section 234E was deleted for the relevant financial year 2013-14, and the appeal by the assessee was allowed.

The judgment highlighted that the amendment under section 200A of the Act, effective from 01.06.2015, had prospective effect, and any demand or intimation for fee under section 234E prior to this date lacked legal authority. The Tribunal emphasized that fees under section 234E could only be levied by the AO post the specified date. As the case before the Tribunal related to the financial year 2013-14, the late fee imposed under section 234E was set aside, aligning with the Karnataka High Court's ruling and the precedent set by the Glee Pharma Pvt. Ltd. case.

In conclusion, the Tribunal allowed the appeal filed by the assessee, setting aside the orders of the lower authorities and deleting the late fee of Rs. 60,200 imposed under section 234E for the 4th Quarter of FY 2013-2014, in line with the legal interpretation that restricted the application of section 234E before 01.06.2015.

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