2019 (7) TMI 1678 - AT - Income Tax

Tribunal rules in favor of Rohit Singh, quashes order & deletes fees. Anand Township appeals dismissed. Other appeals partly allowed.

The Tribunal allowed the appeal of Rohit Singh (ITANo.422/Ind/2019), quashing the CPC order and deleting the fee. Appeals in ITANo.930 to 932/Ind/2018 ... Levying late fees u/s 234E - Late filing of TDS returns / statement - statement processed u/s 200A - HELD THAT:- From going through the provisions of sections 234E and 200A of the Act we find that the provision for levying fee for default in furnishing statement was inserted w.e.f 01.07.2012. The power to process the statement of tax deducted at source are provided in section 200A of the Act. The date of CPC order is the yardstick to examine the applicability of the amendment brought by the Finance Act 2015 w.e.f 01.06.2015. If the default is committed by a person in delivering the TDS statement within the time prescribed in sub-section (3) of section 200 of the Act or proviso to sub-section (3) of section 206C of the Act, from 01.07.2012 provision of section 234E of the Act comes into operation and if the default continues and the CPC order is passed on and after 01.06.2015 then even if the CPC order relates to quarters for F.Y. 2014-15 and earlier years, and the tax has been deposited before 01.06.2015 will have no relevance. This contentions of the Ld. counsel for the assessee has no merits. There is a clear provision in the scheme giving powers to the CPC to process the TDS return any the manner as specified u/s 200A(1) of the Act which provides that the statement shall be processed with regard to the tax deducted, arithmetical error incorrect claim, interest as well as the fee u/s 234E and other adjustment as provided in sub-section (1) of section 200A of the Act. So in our considered view CPC have sufficient power to levy fee u/s 234E of the Act for late filing of TDS return. As relying on SHRI UTTAM CHAND GANGWAL M/S ADINATH STONES VERSUS THE ACIT, CPC (TDS) , GHAZIABAD [2019 (1) TMI 1355 - ITAT JAIPUR] CIT(A) has rightly confirmed the levy of fee u/s 234E of the Act by the CPC, however we direct the revenue authorities to make necessary verification in each of the case so as to look into the fact that in case if any fee u/s 234E is levied for the delay in filing return for the period before 01.06.2015, the same is directed to be deleted and the remaining fee levied for the default committed from 01.06.2015 onwards needs to be confirmed. - Decided in favour of assessee partly. Issues Involved:1. Whether the Revenue authorities were justified in levying the late fees under Section 234E of the Income Tax Act in the statement processed under Section 200A of the Act.Detailed Analysis:Issue 1: Jurisdiction to Levy Late Fees under Section 234E:The primary issue in all the appeals was whether the Revenue authorities were justified in levying late fees under Section 234E of the Act in the statements processed under Section 200A of the Act. The Tribunal examined the provisions of Sections 200A and 234E of the Act. Section 200A outlines the procedure for processing statements of tax deduction at source (TDS), including the computation of fees under Section 234E for delays in filing TDS returns. Section 234E imposes a fee of Rs. 200 per day for delays in filing TDS statements, effective from July 1, 2012.Pre-Amendment and Post-Amendment Analysis:The Tribunal noted that an amendment to Section 200A by the Finance Act, 2015, effective from June 1, 2015, empowered Revenue authorities to levy fees under Section 234E while processing TDS statements. This amendment was not clarificatory but prospective in nature. Therefore, for periods before June 1, 2015, Revenue authorities had no jurisdiction to levy fees under Section 234E.Specific Case Analysis:1. Case of Rohit Singh (ITANo.422/Ind/2019):- The TDS return for Q-4 of FY 2014-15 was filed on February 2, 2015, and the CPC order was passed on January 9, 2017.- The Tribunal found that the CPC order was barred by limitation since it was issued after the statutory period, which ended on March 31, 2016.- Consequently, the Tribunal quashed the CPC order and deleted the levy of fees amounting to Rs. 36,759.2. Remaining Cases:- For other cases, the Tribunal observed that the dates of filing TDS returns and CPC orders were post-June 1, 2015.- The Tribunal held that for defaults continuing after June 1, 2015, the Revenue authorities had jurisdiction to levy fees under Section 234E.- The Tribunal referenced the decision of the Coordinate Bench of Jaipur in the case of Uttam Chand Gangwal vs. ACIT, which upheld the levy of fees for periods post-June 1, 2015, even if the TDS return pertained to periods before this date.Contentions and Findings:1. Contention of Assessees:- Assessees argued that before the amendment by the Finance Act, 2015, Revenue authorities had no power to levy fees under Section 234E.- They also contended that the Central Processing Cell (CPC) lacked specific powers to levy such fees.- For quarters before June 1, 2015, and where TDS was deposited before this date, fees should not be levied.2. Tribunal's Findings:- The Tribunal found no merit in the contention that CPC lacked powers, citing the 'Centralised Processing Cell statements of tax deducted at source Scheme of 2013,' which empowered CPC to process TDS returns and levy fees under Section 234E.- The Tribunal directed Revenue authorities to verify and delete any fees levied for periods before June 1, 2015, while confirming fees for defaults from June 1, 2015, onwards.Conclusion:The Tribunal allowed the appeal of Rohit Singh (ITANo.422/Ind/2019), quashing the CPC order and deleting the fee. Appeals in ITANo.930 to 932/Ind/2018 (Anand Township Indore P. Ltd.) were dismissed. The remaining seven appeals were partly allowed, with directions to delete fees for periods before June 1, 2015, and confirm fees for defaults from June 1, 2015, onwards.