2019 (1) TMI 1739 - AT - Income Tax

Amendment to Section 200A Prospective: Late Fees for TDS Statements Pre-2015 Not Applicable

Bhupesh Kumar J. Sanghvi, M/s Shankeshwar Developers, Smt. Beena Sanghvi Indore, M/s Rahela Engineers Private ltd., Gokuldas Hospitals Pvt. Ltd., M/s. JBB Marketing Private Ltd., M/s. Sono Medical Centre Pvt. Ltd., M/s. Divisional Forest Officer, M/s. Abacus Combines Private Limited, M/s. Executive Engineer Versus DCIT (Centralized processing Cell-TDS), Ghaziabad

The Tribunal held that the amendment to Section 200A by the Finance Act, 2015, effective from 01.06.2015, is prospective. Therefore, late fees under ... Late fees u/s 234E - processing the statement of tax deducted at source u/s 200A - amendment brought in the Finance Act 2015 w.e.f. 01.06.2015 paved the way for levying the fee u/s 234E of the Act in the statement processed u/s 200A - HELD THAT:- Following the decisions given by us in the case of State Bank of India, Genda Chowk and others [2018 (12) TMI 1229 - ITAT INDORE] and M/s. Madhya Pradesh Power Transmission Ltd. & others [2018 (12) TMI 1323 - ITAT INDORE] are of the opinion that Ld. CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings of ld. CIT(A) in all these 93 appeals are set aside and revenue is directed to delete the levy of fees u/s 234E of the Act in all these 93 cases. Thus, common issue raised in these bunch of appeals is decided in favour of the assessee. Issues Involved:1. Justification of levying late fees under Section 234E of the Income Tax Act while processing the statement of tax deducted at source under Section 200A before the amendment effective from 01.06.2015.Detailed Analysis:1. Justification of Levying Late Fees under Section 234E:Background and Facts:The appellants were required to file the statement of tax deducted at source (TDS) for respective quarters but failed to do so within the prescribed due dates. Consequently, the revenue authorities levied late fees under Section 234E of the Income Tax Act during the processing of TDS statements under Section 200A. The appellants contended that before the amendment brought by the Finance Act, 2015 effective from 01.06.2015, the revenue authorities did not have the power to levy such fees under Section 234E in statements processed under Section 200A.Appellants' Arguments:The appellants argued that the issue is covered in their favor by several decisions of the Coordinate Bench, including:- Mentor India Limited vs. DCIT- Sudershan Goyal vs. DCIT (TDS)- State Bank of India, Gwalior vs. CIT(A)- State Bank of India, Genda Chowk and others vs. DCIT(TDS)- M/s. Madhya Pradesh Power Transmission Ltd. & othersThey further referenced the Karnataka High Court's judgment in Fatehraj Singhvi vs. UOI, which favored the assessee, and the Gujarat High Court's judgment in Rajesh Kaurani vs. UOI, which was against the assessee. They cited the Supreme Court's ruling in CIT vs. Vatika Township Pvt. Ltd. and CIT vs. Vegetable Products Ltd., which held that in the case of divergent opinions, the view favoring the assessee should be followed.Respondent's Arguments:The Departmental Representative failed to counter the appellants' submissions effectively.Tribunal's Findings:The Tribunal reviewed the rival contentions and various judicial pronouncements. It noted that the issue had been consistently adjudicated in favor of the assessee by the Coordinate Bench, holding that the amendment to Section 200A brought by the Finance Act, 2015, effective from 01.06.2015, is prospective. Therefore, no computation for fees under Section 234E could be made for TDS statements prepared before 01.06.2015 and processed under Section 200A.The Tribunal referenced several cases, including:- Sudarshan Goyal vs. DCIT (TDS), where it was held that prior to 01.06.2015, there was no enabling provision under Section 200A for levying fees under Section 234E.- Mentor India Ltd., where the Tribunal followed the Karnataka High Court's decision in Fatehraj Singhvi, holding that no late fee under Section 234E could be levied for periods before 01.06.2015.- State Bank of India, Gwalior, where the Tribunal reiterated that in the absence of an enabling provision under Section 200A before 01.06.2015, such a levy was invalid.Conclusion:The Tribunal concluded that the CIT(A) erred in confirming the levy of late fees under Section 234E by the assessing officer. It set aside the CIT(A)'s findings and directed the revenue to delete the levy of fees under Section 234E in all 93 cases. The common issue raised in these appeals was decided in favor of the assessees.Result:All 93 appeals were allowed, and the order was pronounced in the open court on 22.01.2019.