2019 (2) TMI 1751 - AT - Income Tax

Tribunal cancels late fee for TDS returns pre-1.6.2015

Sila Solutions Private Ltd. Versus ACIT (TDS) - CPC, Ghaziabad & DCIT, TDS Circle-2 (2), Mumbai.

The Tribunal allowed all the appeals filed by the assessee, directing the AO (TDS-CPC) to delete the late fee imposed under section 234E for the TDS ... Late fee imposed u/s 234E - TDS returns filed after due date by the assessee but prior to 1.6.2015 - HELD THAT:- There are conflicting decisions on the same issue of various High Courts, the decision which are in favour of the assessee are to be followed in view of the decision of the Hon'ble Supreme Court in the case of Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] . In our opinion, the Coordinate Bench of Agra Tribunal in the case of Sudarshan Goyal [2018 (5) TMI 1626 - ITAT AGRA] has correctly laid down the ratio considering the facts of the assessee’s case in the light of the above decisions. Accordingly, we are inclined to set aside the order of the ld.CIT(A) and direct the AO (TDS-CPC) to delete the late fee as levied u/s 234E of the Act. Issues involved:Challenge against the imposition of late fee under section 234E of the Income Tax Act, 1961 for TDS returns filed after the due date but before 1.6.2015.Detailed Analysis:1. Issue of Late Fee Imposition:The appeals by the assessee were against the orders of the Commissioner of Income Tax (Appeals) confirming the late fee imposed by the AO (TDS-CPC) under section 234E of the Income Tax Act, 1961 for TDS returns filed after the due date but before 1.6.2015. The assessee contended that the late fee was wrongly levied as the returns were filed and processed prior to the amendment in section 200A introduced by the Finance Act, 2015. The assessee argued that only returns filed after 1.6.2015 could be subjected to the late fee under section 234E. The assessee cited various legal precedents to support their argument, emphasizing that the late fee imposition for TDS statements prior to 1.6.2015 was invalid without the enabling provisions of section 200A.2. Arguments of the Parties:The assessee's representative argued that the late fee imposition was incorrect based on the provisions of the Act and the amendments introduced by the Finance Act, 2015. They relied on legal judgments to support their position. On the other hand, the Departmental Representative (DR) supported the orders of the lower authorities, asserting that the late fee was mandatory and could be imposed even for returns filed before 1.6.2015. The DR contended that the amendment in section 200A did not prohibit the imposition of late fees for returns prior to the specified date.3. Judicial Analysis and Decision:The Tribunal analyzed the provisions of the Act, specifically section 200A and 234E, in light of the amendments made by the Finance Act, 2015. The Tribunal noted that the enabling provisions under section 200A did not allow for the imposition of late fees for returns filed before 1.6.2015. Citing legal precedents, the Tribunal emphasized the prospective effect of statutory provisions unless expressly provided otherwise. The Tribunal referred to conflicting decisions of various High Courts but followed the decisions favoring the assessee, as per the Supreme Court's directive. Consequently, the Tribunal set aside the orders of the lower authorities and directed the AO (TDS-CPC) to delete the late fee imposed under section 234E.4. Decision on Appeals:The Tribunal allowed all the appeals filed by the assessee, directing the AO (TDS-CPC) to delete the late fee imposed under section 234E for the TDS returns filed before 1.6.2015. The decision was based on the interpretation of the relevant provisions of the Act and legal precedents supporting the assessee's position.This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the arguments presented, judicial analysis conducted, and the final decision rendered by the Tribunal.