Tribunal Invalidates Late Fees Pre-2015, Assessee Appeals Succeed

The Tribunal allowed the appeals of the assessee, holding that the levy of late fees under Section 234E for periods prior to the amendment effective from 01/06/2015 was without authority of law. The Tribunal followed various judicial precedents that consistently ruled the amendment to Section 200A as prospective, thereby invalidating any fees levied under Section 234E for periods before 01/06/2015. The demands raised for late filing fees under Section 234E for the years under consideration were deleted, and the appeals of the assessee were allowed.

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Issues Involved:
1. Levy of late fee under Section 234E of the Income Tax Act, 1961.
2. Validity of intimation under Section 200A for levying fees under Section 234E for periods prior to the amendment effective from 01/06/2015.

Analysis of Judgment:

1. Levy of Late Fee under Section 234E:
The primary grievance of the assessee was regarding the levy of late fee by invoking the provisions of Section 234E of the Income Tax Act, 1961, in the intimation passed under Section 200A of the Act. The assessee had failed to deduct TDS on a payment made to HSIIDC and subsequently delayed the filing of the TDS statement in Form No. 26QB. The Assessing Officer issued an intimation under Section 200A, raising a demand for late filing fees under Section 234E for the financial years 2013-14 and 2014-15.

2. Validity of Intimation under Section 200A:
The Ld. CIT(A) upheld the action of the Assessing Officer, noting that the levy of fee for default in furnishing TDS statements is governed by Section 234E. It was observed that Section 234E is not punitive but a fixed charge for late filing of TDS statements. The Ld. CIT(A) also referenced the Gujarat High Court's decision in Rajesh Kourani Vs Union of India, which held that the amendment to Section 200A effective from 01/06/2015 is clarificatory and applicable retrospectively.

Tribunal's Findings:
The Tribunal considered various precedents, including decisions from the ITAT Delhi Bench, ITAT Amritsar, and ITAT Pune, which consistently held that the levy of fees under Section 234E prior to the amendment effective from 01/06/2015 was without authority of law. Specifically, the Tribunal noted:

- GNA Udyog Ltd. Vs. Asst. CIT: The ITAT Delhi Bench held that the fee under Section 234E could not be levied for periods prior to 01/06/2015 as the amendment to Section 200A was prospective.
- Meghna Gupta Vs. Asst. CIT: The ITAT Delhi Bench ruled that no fee under Section 234E was leviable for TDS statements filed prior to 01/06/2015.
- Medical Superintendent Rural Hospital Vs. DCIT: The ITAT Pune Bench reiterated that the amendment to Section 200A was prospective and not applicable to periods before 01/06/2015.

The Tribunal also referred to the Karnataka High Court's decision in Fatheraj Singhvi & Ors. Vs. Union of India, which held that the computation and intimation for payment of fees under Section 234E for periods prior to 01/06/2015 were illegal and invalid.

Conclusion:
Based on the consistent judicial precedents, the Tribunal concluded that the Assessing Officer erred in levying fees under Section 234E for periods prior to 01/06/2015. The demands raised for late filing fees under Section 234E for the years under consideration were deleted, and the appeals of the assessee were allowed.

Summary:
The Tribunal allowed the appeals of the assessee, holding that the levy of late fees under Section 234E for periods prior to the amendment effective from 01/06/2015 was without authority of law. The Tribunal followed various judicial precedents that consistently ruled the amendment to Section 200A as prospective, thereby invalidating any fees levied under Section 234E for periods before 01/06/2015.

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