ITAT allows appeal against late fee levy under section 234E for AY 2015-16

The ITAT allowed the appeal against the Ld. CIT (Appeal) order for AY 2015-16, concerning the levy of late fee u/s 200(3) of the Act. The ITAT held that the levy of fee u/s 234E was unsustainable in law as the enabling provision of section 200A was effective from 01.06.15, and no fee computation for TDS deducted before that date could be made under section 234E. The appeal was allowed, and the impugned levy of fee u/s 234E was deleted, with no order as to costs.

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Issues:
Appeal against order of Ld. CIT (Appeal) for AY 2015-16 regarding levy of late fee u/s 200(3) of the Act.

Analysis:
The appeal was filed by the assessee against the order of Ld. CIT (Appeal) for AY 2015-16 regarding the fee levied for delay in furnishing the statement u/s 200(3) of the Act. The assessee claimed that the TDS amount and interest were for a period before the provisions of late fee levy were applicable. The amendment u/s 200A of the Act was argued to have prospective effect, making the order demanding late fee legally invalid.

The Ld. CIT(A) had held that Section 234E was inserted by the Finance Act 2012, making a person liable for a fee for failure to deliver a statement on time. The late fee provision under Section 234E was deemed applicable despite the absence of an enabling authority through an intimation u/s 200A. The judgments cited supported the view that the levy of late fee u/s 234E could not be challenged by the assessee.

The ITAT considered various judgments and legal propositions presented by both parties, including the enabling provision of section 200A effective from 01.06.15. It was concluded that no fee computation for TDS deducted before 01.06.15 could be made under section 234E. The absence of contrary judgments to challenge the legal propositions cited in the judgments led to the decision that the levy of fee u/s 234E in the present case was unsustainable in law. Consequently, the appeal was allowed, and the impugned levy of fee u/s 234E was deleted.

In conclusion, the ITAT upheld the grievance of the assessee, ruling that the levy of fee u/s 234E of the Act in this case was unsustainable in law. The appeal was allowed with no order as to costs.

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