Tribunal rules fee for delay in TDS returns not applicable pre-June 2015

The Tribunal allowed the appeal of the assessee in a case challenging the levy of fee under Section 234E for delay in filing TDS returns for the Assessment Year 2015-16. The Tribunal held that the fee under Section 234E could not be imposed for defaults before June 1, 2015, and canceled the demand under Section 234E, citing a Karnataka High Court decision. The assessee's appeal was allowed, and the levy of fee under Section 234E was deemed inapplicable for the relevant period.

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Issues:
Challenge to levy of fee under Section 200A for delay in filing TDS return for Assessment Year 2015-16.

Analysis:
1. The appeal was filed against the order passed by the Commissioner of Income Tax (Appeals) regarding the levy of fee under Section 200A for delay in filing the TDS return. The Assessing Officer had issued a notice against the demand under Section 234E for the financial year 2014-15 due to a delay in filing the TDS return for three quarters, imposing a fee of Rs. 1,84,730.

2. The CIT (A) upheld the levy of fee under Section 234E, stating that it was applicable during the relevant assessment year. The assessee cited judgments of the Rajasthan High Court and Gujarat High Court, but the counsel argued that the issue was covered by a Tribunal decision in the case of Meghna Gupta vs. ACIT, which clarified the applicability of the fee under Section 200A from June 1, 2015.

3. The Tribunal considered the submissions and found that the assessee had deposited TDS for the financial year 2015-16 on time but failed to submit the TDS return for three quarters promptly due to the tax consultant's delay. The Tribunal referred to Section 200A and the amendment brought by the Finance Act, 2015, which prescribed the levy of fee under Section 234E. The Tribunal analyzed the provisions and relevant case laws to determine the applicability of the fee.

4. Referring to the Karnataka High Court's decision in Fatheraj Singhvi v. Union of India, the Tribunal concluded that no fee was leviable under Section 234E as the assessee had promptly furnished the statement after depositing the tax without delay. Therefore, the demand under Section 234E was canceled, and the appeal of the assessee was allowed.

5. The Tribunal held that the levy of fee under Section 234E could not be imposed for defaults before June 1, 2015. Consequently, the appeal of the assessee was allowed, and the demand under Section 234E was canceled.

6. The order was pronounced in the open court on 26th April 2019, with the appeal of the assessee being allowed.

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