2019 (11) TMI 1390 - AT - Income Tax

Tribunal Invalidates Late Filing Fees Pre-2015

The Tribunal held that the imposition of late filing fees under Section 234E for periods before 01.06.2015 was not valid. The Assessing Officer lacked ... Late filing fee u/s 234E - Delay in filing TDS statements - intimation issued to the assessee u/s 200A - HELD THAT:- The assessee, Udit Jain had deducted tax at source u/s 195 of the Act against purchase of property. The tax was deducted at 18.05.2015 and was even paid on 18.05.2015, though the return in Form No.27A was filed on 23.06.2016. Since the period under consideration is first quarter of Financial Year 2015-16 i.e. prior to the amendment to section 200A(1) of the Act wherein clause (c) was inserted w.e.f. 01.06.2015 and since the assessee had already deposited the tax deducted at source, on the same day of deduction, there was reasonable cause in the hands of the assessee in not depositing the return in Form No.27A and the said default needs to be condoned. See MEDICAL SUPERINTENDENT RURAL HOSPITAL DODI BK AND JUNAGADE HEALTHCARE PVT. LTD. VERSUS THE DY. COMMISSIONER OF INCOME TAX, CPC (TDS) AND THE ASST. COMMISSIONER OF INCOME TAX, CPC (TDS) , GHAZIABAD [2018 (10) TMI 1587 - ITAT PUNE] Jurisdictional issue of exercise of power by the AO in charging late filing fee u/s 234E of the Act, suffers from infirmity as clause (c) to section 200(A)(1) of the Act has been made applicable specifically from the date from 01.06.2015. Since the period of default was before the said date i.e. 01.06.2015, there is no merit in charging late filing fee u/s 234E. As we hold that no late filing fee is to be charged, then consequent interest charged u/s 220(2) of the Act also do not survive. - Decided in favour of assessee. Issues Involved:1. Imposition of late filing fee under Section 234E of the Income Tax Act.2. Jurisdictional authority to levy fees under Section 234E prior to the amendment effective from 01.06.2015.3. Validity of intimation issued under Section 200A for periods before 01.06.2015.4. Consideration of decisions from different High Courts on the applicability of Section 234E.Issue-wise Detailed Analysis:1. Imposition of Late Filing Fee under Section 234E:The core issue in the appeals was the imposition of late filing fees under Section 234E of the Income Tax Act. The appellants had deducted tax at source but failed to file the required statements in time, leading to the levy of late filing fees. The Tribunal examined whether such fees could be imposed for periods before the amendment to Section 200A(1) that came into effect on 01.06.2015.2. Jurisdictional Authority to Levy Fees under Section 234E Prior to 01.06.2015:The Tribunal noted that Section 234E prescribes a fee for every day of default in filing the statement under Section 200(3). However, the key contention was whether the Assessing Officer had the jurisdiction to levy such fees before the amendment to Section 200A(1). The Tribunal referred to the Karnataka High Court's decision in Fatehraj Singhvi & Others vs Union of India, which held that the amendment to Section 200A(1) was prospective and not retroactive. Therefore, the Assessing Officer did not have the authority to levy fees under Section 234E for periods before 01.06.2015.3. Validity of Intimation Issued under Section 200A for Periods Before 01.06.2015:The Tribunal examined the validity of intimations issued under Section 200A for periods before the amendment. The Tribunal held that the Assessing Officer was not empowered to charge fees under Section 234E for TDS statements filed for periods prior to 01.06.2015, even if the statements were filed late or processed after this date. This position was consistent with the Karnataka High Court's ruling and decisions from other Tribunal benches, such as the Pune Bench in Medical Superintendent Rural Hospital vs DCIT.4. Consideration of Decisions from Different High Courts:The Tribunal also considered conflicting decisions from different High Courts. The Gujarat High Court in Rajesh Kourani vs Union of India upheld the levy of fees under Section 234E, while the Karnataka High Court in Fatehraj Singhvi & Others ruled against it for periods before 01.06.2015. In the absence of a jurisdictional High Court decision, the Tribunal followed the principle that the decision favorable to the assessee should be applied, as held by the Supreme Court in Vegetable Products Ltd.Conclusion:The Tribunal concluded that the imposition of late filing fees under Section 234E for periods before 01.06.2015 was not valid. The amendments to Section 200A(1) were prospective, and the Assessing Officer did not have the authority to levy such fees for earlier periods. Consequently, the demands raised by charging late filing fees under Section 234E were deleted, and the appeals were allowed in favor of the assessee.