Appeals allowed for penalty demands under section 234E pre-amendment, lack of legal authority recognized

The Tribunal allowed the appeals, ruling that demands for penalty/fee under section 234E for the assessment years 2013-14 to 2015-16, made before 01-06-2015, were unsustainable. The Tribunal emphasized the lack of legal authority for such demands pre-amendment. Additionally, the Tribunal validated the appeals as the Revenue failed to provide evidence of service of the order under section 200A, leading to a decision in favor of the assessee.

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Issues:
Appeals against combined order of CIT(A) for Assessment Years 2013-14 to 2015-16 regarding the levy of penalty/fee under section 234E prior to 01-06-2015.

Analysis:

Issue 1: Levy of Penalty/Fee under Section 234E
The assessee raised three common grounds challenging the levy of penalty/fee under section 234E for the assessment years 2013-14 to 2015-16. The assessee relied on judgments by the High Court of Karnataka and ITAT Amritsar, which held that no penalty/fee can be levied under section 234E for periods prior to 01-06-2015 when the new clause (c) was inserted. The AR of the assessee argued that the demand raised for these years is not sustainable in law as it falls before the effective date of the amendment. The Revenue, however, supported the order of CIT(A) stating that the assessee failed to produce any order under section 200A challenged by them, making the appeals not maintainable. The Tribunal considered the submissions and noted that the demands in question were for periods before 01-06-2015, making them unsustainable. The Tribunal referenced the judgment of the Hon’ble Karnataka High Court to support its decision, emphasizing that demands for periods prior to 01-06-2015 are without authority under law.

Issue 2: Validity of Appeals
The Revenue contended that the appeals filed by the assessee were not maintainable as they did not produce the order under section 200A challenged by them. The AR of the assessee argued that no such order was served, and the first intimation of the outstanding demand was through a letter dated 26.11.2018. The Tribunal examined the letter and found no reference to the date of the order passed by the AO or proof of service to the assessee. As the Revenue could not provide evidence of service, the Tribunal considered the appeals valid and proceeded to decide on the merits. The Tribunal ultimately allowed the appeals, deleting the demands as they pertained to periods before 01-06-2015.

In conclusion, the Tribunal allowed the appeals of the assessee, holding that the demands for penalty/fee under section 234E for the assessment years 2013-14 to 2015-16, raised before 01-06-2015, were unsustainable. The Tribunal emphasized the lack of authority under law for such demands before the effective date of the relevant amendment. The Tribunal also validated the appeals filed by the assessee, as no evidence of service of the order under section 200A was provided by the Revenue, leading to the decision to consider the appeals on merit and ultimately ruling in favor of the assessee.

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