2019 (1) TMI 1613 - AT - Income Tax

Tribunal: Assessing Officer lacked authority to levy Section 234E fees pre-01.06.2015

M/s. Bathija International Versus DCIT – CPC – TDS, Mumbai

The Tribunal ruled in favor of the appellant, holding that prior to 01.06.2015, the Assessing Officer lacked authority to levy fees under Section 234E of ... Late filing fee u/s 234E - processing the statement under Section 200A - HELD THAT:- The late fee envisaged in Section 234E of the Act has been charged by the Assessing Officer in this case while processing the TDS statement under Section 200A of the Act on 14.06.2013, which is indeed prior to 01.06.2015. Ostensibly, a perusal of bare provisions of Section 200A of the Act show that prior to 01.06.2015, it did not empower the AO to levy the fee prescribed in Section 234E of the Act, while processing the statement of TDS. Thus, the stand of the assessee is borne out of the bare provisions of the Act, as it stood at the relevant point of time. Our coordinate bench in the case of M/s. Dhami Finance Ltd. [2017 (11) TMI 1847 - ITAT MUMBAI] has also taken a similar view. In fact, the Mumbai bench has noted and followed an earlier decision of the Pune bench of the Tribunal in the case of Gajanan Constructions and others [2016 (11) TMI 1247 - ITAT PUNE] . In so far as the reliance placed by the CIT(A) on the judgment of MR RASHMIKANT KUNDALIA AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2015 (2) TMI 412 - BOMBAY HIGH COURT] , the same is quite misplaced wherein merely upheld the constitutional validity of Section 234E of the Act; and not dealing with the issue as to whether prior to 01.06.2015, while processing the TDS statement under Section 200A of the Act, the late fee envisaged under Section 234E of the Act, could be levied or not. Thus, reliance placed on this case above is misplaced, as it has been rendered in an altogether different context. We delete the levy of fee charged by the Assessing Officer under Section 234E of the Act while processing the statement under Section 200A of the Act, as being bereft of jurisdiction at the relevant point of time. Issues:Levy of fees under Section 234E of the Income Tax Act, 1961 for late filing of TDS statement for financial year 2012-13.Analysis:The appeal was filed against the order of the CIT(A) upholding the levy of fees under Section 234E of the Income Tax Act, 1961, imposed by the Assessing Officer for the delay in filing the quarterly TDS statement for Q2 of financial year 2012-13. The appellant contested the imposition of the fee, arguing that prior to 01.06.2015, the Assessing Officer did not have the authority to levy the fee prescribed in Section 234E of the Act while processing the TDS statement under Section 200A of the Act. The appellant relied on the decision of the Mumbai bench of the Tribunal in a similar case to support their argument.The Revenue opposed the appellant's plea, citing a judgment of the Bombay High Court which upheld the imposition of the fee. However, the Tribunal noted that the High Court's judgment focused on the constitutional validity of Section 234E and did not address the specific issue of whether the fee could be levied prior to 01.06.2015 while processing the TDS statement under Section 200A of the Act. The Tribunal also referred to a previous decision of the Pune bench which supported the appellant's argument.After considering the submissions from both sides, the Tribunal concluded that prior to 01.06.2015, the Assessing Officer did not have the authority to levy the fee prescribed in Section 234E of the Act while processing the TDS statement under Section 200A. Therefore, the Tribunal ruled in favor of the appellant, deleting the levy of the fee and allowing the appeal. The judgment was pronounced on 18th January, 2019.