2019 (8) TMI 1533 - AT - Income Tax

Successful Appeal: No Late Filing Fees for Assessment Year 2015-16

Vkare Bio Sciences Pvt. Ltd. Versus Deputy Commissioner of Income Tax (CPC-TDS), Ghaziabad

The appeal against the order of the Ld. CIT(A) regarding section 200A of the Act and levy of late filing fees u/s 234E for the assessment year 2015-16 was ... Levy of fee u/s 234E - violation of section 200(3) - delay in filing of statement in regard third quarter for the financial year 2014-15 - HELD THAT:- We find delay in filing of statement in regard third quarter for the financial year 2014-15. The demand has been raised by the department u/s 200 of the Act in terms of failure to comply with section 200A of the Act which deals with the processing of statement of tax deducted at source u/s 200 of the Act. First of all, sub section 3 of section 200 of the Act provides that the person deducting any sum in accordance with provision of chapter XVII shall after paying the tax deducted to the credit of the Central Government within the prescribed time and prepare such statement for such period as may be prescribed. Provision of section 200A of the Act provides that where the statement of tax deduction at source has been made by the person deducting any sum u/s 200 of the Act, then such statement shall be processed in the manner given therein. Nowhere in the judgments Hon'ble Courts have held that the fees u/s 200A read with section 234E shall be levied prior to 1.06.2015, because prior to this date has not prescribed levy of fees u/s 200A. Thus, we hold that no fee was leviable to the assessee u/ s 234E in violation of section 200(3), because assessee had furnished the statement immediately after depositing all the tax without any delay. Accordingly, the demand on account of 234E is cancelled. Accordingly, the appeal of the assessee is allowed. Issues Involved:Appeal against order of Ld. CIT(Appeals) on section 200A of the Act and levy of late filing fees/penalty u/s 234E for assessment year 2015-16.Analysis:The appeals were filed against the order of Ld. CIT(Appeals) on the issue of section 200A of the Act and levy of late filing fees u/s 234E for the assessment year 2015-16. The assessee did not appear during the proceedings. The late filing fee of Rs. 3,000 u/s 234E was levied by the department. The Ld. CIT(A) referred to the judgment of the Hon’ble Bombay High Court and ruled against the assessee. The Ld. DR relied on judgments of the Hon’ble Delhi High Court and the Hon’ble Bombay High Court to support the automatic levy of fee u/s 234E in case of delay in filing the statement of tax at source.Upon reviewing the impugned orders, it was found that there was a delay in filing the statement for the third quarter of the financial year 2014-15. The demand was raised under section 200 of the Act due to non-compliance with section 200A, which deals with the processing of tax deducted at source. The provision of section 200A states that the fee shall be computed in accordance with section 234E. The fee under section 234E is leviable if the statement is not filed as prescribed under section 200(3) of the Act, which requires the statement to be filed after the tax has been paid. The demand in this case was based on the non-furnishing of the statement for tax deduction at source, but the relevant provisions do not indicate a violation of section 200(3).The Hon’ble Karnataka High Court clarified that the levy of fee u/s 200A in accordance with section 234E came into effect from 1.6.2015. Since the challan and statement were filed before this date, no tax could be levied u/s 200A. The judgments relied upon by the Ld. DR did not support the levy of fees u/s 200A read with section 234E before 1.6.2015. Hence, it was held that no fee was leviable to the assessee under section 234E, and the demand on account of 234E was cancelled, resulting in the appeal of the assessee being allowed.In conclusion, the appeals of the assessee were allowed, and the demand under section 234E was cancelled.