2020 (1) TMI 1192 - AT - Income Tax

Tribunal allows appeals challenging late filing fees under Income Tax Act Section 234E

M/s. Rajyas Software Pvt. Ltd., M/s. Champak Mines and Minerals, M/s. Tayani Minerals Pvt. Ltd., M/s. Padgilwar Agro Industries, M/s. Minor Irrigation, M/s. Audarya Construction Pvt. Ltd. And Ors., M/s. Shri Salasar Digital Pvt. Ltd., Mr. Uttam Singh Rauthan Versus ACIT

M/s. Rajyas Software Pvt. Ltd., M/s. Champak Mines and Minerals, M/s. Tayani Minerals Pvt. Ltd., M/s. Padgilwar Agro Industries, M/s. Minor Irrigation, ... Issues Involved:1. Condonation of Delay2. Levy of Late Filing Fees under Section 234E of the Income Tax Act, 1961A. Preliminary Issue - Condonation of DelayAt the outset, the Tribunal noted that some of the appeals were time-barred by three days. The assessee filed an affidavit along with a condonation of delay petition. Upon reviewing the petition and affidavit, the Tribunal found the reasons for the delay justified and not attributable to any deliberate conduct by the assessee. The delay was beyond the control of the assessee, and the Revenue had no objection to the condonation. Consequently, the Tribunal condoned the delay and proceeded to hear the appeals on merits.B. Merits of the IssueThe core issue in these appeals was the levy of late filing fees under Section 234E of the Income Tax Act, 1961, by the Assessing Officer (AO) during the processing of TDS statements under Section 200A.1. Legislative Amendment and Its Applicability:- The Tribunal noted that Clause (c) to Section 200A(1) was inserted specifically from 01.06.2015. The assessee argued that since the amendment was not clarificatory or retrospective, late filing fees could not be charged for TDS statements filed before or after 01.06.2015 based on the new amendment.- The Tribunal acknowledged that Section 234E, introduced by the Finance Act, 2012 effective from 01.07.2012, enabled the levy of late filing fees. However, the unamended Section 200A did not empower officers to charge such fees until the amendment in 2015.2. Judicial Precedents:- The Tribunal referenced several judicial precedents, including decisions from the Pune Bench of the Tribunal and the Karnataka High Court in the case of Fatheraj Singhvi, which held that the amendment to Section 200A was prospective. Therefore, the AO lacked jurisdiction to levy late filing fees for periods before 01.06.2015, even if the TDS statements were filed or processed after this date.- The Tribunal highlighted key judgments:- C & M Farming Ltd. vs. ACIT: The AO cannot charge late fees under Section 234E for periods before 01.06.2015.- Medical Superintendent Rural Hospital vs. DCIT: Late filing fees cannot be charged for periods before 01.06.2015, even if the TDS returns were filed or processed after this date.- Fatheraj Singhvi vs. Union of India: The amendment to Section 200A is prospective, and fees under Section 234E cannot be demanded for periods before 01.06.2015.- Alpha Electronics Pvt. Ltd. vs. ACIT: Reiterated that late filing fees under Section 234E cannot be levied for periods before 01.06.2015.3. Specific Case Analysis:- The Tribunal reviewed the specific details of the quarters involved, due dates, and actual filing dates of TDS statements for the financial years 2012-13, 2013-14, and 2014-15. It was found that most TDS statements were filed before 01.06.2015, with a few exceptions where they were filed after this date.- The Tribunal directed the AO to closely examine the facts, dates of defaults, and claims of the assessee to ensure correct application of the law. If the defaults pertained to periods after 01.06.2015, the provisions for late filing fees under Section 234E read with Section 200A would apply.Conclusion:The Tribunal concluded that the late filing fees charged by the AO were unsustainable in law for periods before 01.06.2015 due to lack of jurisdiction. All 111 appeals were allowed, and the AO was directed to re-examine the cases with the correct application of the law.Order Pronounced:The order was pronounced in open Court on 31st January 2020.