2019 (10) TMI 1270 - AT - Income Tax

Tribunal clarifies retroactive late filing fees under Income Tax Act, upholds natural justice

The Income Tax Appellate Tribunal allowed the appeal, holding that the levy of late fee under section 234E was valid only from 01.06.2015 onwards. The ... Levy of fee u/s.234E - late filing of quarterly TDS return - Assessment u/s 200A - HELD THAT:- As noticed that in the acknowledgement there was no any failure on the part of the assessee has been shown i.e. short payment, short deduction/collection, interest on payment default u/s.201(1A)/206C(7), interest on short payment, interest on late payment, interest on deduction/collection default u/s.201(1A)/206C(7), interest on short deduction/collection, interest on late deduction/collection. Thus amply clear that the assessee had deducted TDS on the due amounts and it has been deposited within the time and there is merely a failure for late filing of quarterly TDS return for the Quarter-IV. The assessee is a Government Department and the case is related to financial year 2013-2014 before amendment in the Act. Merely the intimation was generated u/s.200A of the Act on 03.06.2015, cannot be the basis for the levy of fee u/s.234E of the Act. - Decided in favour of assessee. See case of Station Headquarters (Army) Vs. ACIT [2019 (9) TMI 607 - ITAT JODHPUR] - direct the AO to delete the fee levied u/s.234E - Decided in favour of assessee. Issues:Appeal against intimation u/s.200A for late filing of TDS return and levy of fee u/s.234E.Analysis:The appeal pertains to an intimation issued under section 200A of the Income Tax Act, 1961 for the fourth quarter of the Financial Year 2013-2014, concerning the assessment year 2014-2015, imposing a fee of Rs. 74,400 for late filing of quarterly TDS return. The appellant raised various grounds challenging the assessment order, including contentions against the levy of late filing fees prior to 01.06.2015, the nature of the assessment orders, and violation of principles of natural justice. The appellant, a Government High School, filed a TDS Quarterly statement for the relevant period but was penalized by the DCIT(TDS-CPC) Ghaziabad for delayed filing. The appeal was dismissed by the CIT(A), leading to the current appeal before the Income Tax Appellate Tribunal.Upon hearing the arguments, it was observed that the demand for late fee was imposed without indicating any other failures on the part of the assessee, except for the late filing of the TDS return for the fourth quarter. The Tribunal referred to a decision by the Jodhpur Bench, emphasizing that the power to levy late fees under section 234E was effective only from 01.06.2015 and not retrospective. The amendment to section 200A clarified the computation of late fees payable under section 234E, with prospective effect from 01.06.2015. Therefore, the Tribunal held that the intimation for late fee prior to 01.06.2015 lacked legal authority. The order of the CIT(A) was set aside, directing the AO to delete the fee of Rs. 74,400 imposed for late filing of the TDS return for the fourth quarter.In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that the levy of late fee under section 234E was valid only from 01.06.2015 onwards until the actual filing of the TDS return. The Tribunal's decision was based on legal interpretations and the specific timeline for the application of late filing fees under the Income Tax Act. The judgment provided clarity on the retrospective nature of the relevant provisions and upheld the principles of natural justice in tax assessments.