Appeals Succeed: Late Fees Pre-2015 Invalid

The appeals against the orders passed by Ld. CIT(A) regarding the imposition of late fees for delays in filing TDS statements were allowed. It was held that late fees could not be imposed for periods before the amendment introduced by the Finance Act, 2015, effective from 1st June 2015. The judgments referred to established that the late fee provisions under section 234E applied only after the said date, and demands for fees before that were not valid. Consequently, the late fees imposed were deemed inapplicable for the period before the amendment, leading to the deletion of the fees.

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Issues:
Appeals against orders passed by Ld. CIT(A) regarding imposition of late fee for delay in filing TDS statements.

Analysis:
The appeals involved identical issues concerning the imposition of late fees for delays in filing TDS statements. The primary question was whether late fees could be imposed for periods before the amendment introduced by the Finance Act, 2015, effective from 1st June 2015, and whether there were enabling provisions for such levy before the said date.

The Co-ordinate Bench, in a previous case, analyzed the law provisions and referred to the judgment of the Gujrat High Court in Rajesh Kourani case, concluding that late fee provisions under section 234E applied only after 1st June 2015 when enabling provisions were introduced. Thus, no late fee could be levied for delays in filing TDS returns processed before the said date.

Additionally, the ITAT, Amritsar Bench in a separate case, held that intimation for fee demand under section 234E before 1st June 2015 was not valid. Despite conflicting judgments, the principle laid down by the Hon'ble Apex Court in CIT Vs. Vegetable Products was followed, favoring the assessee in case of ambiguity in taxing provisions.

Referring to the judgment of Hon'ble Karnataka High Court, it was established that the amendment from 1st June 2015 had prospective effect, not retroactive. Therefore, the demand for fee under section 234E for periods before 1st June 2015 was not valid. Citing consistency with previous judgments, the late fees imposed were deemed inapplicable for the period before the said amendment, leading to the allowance of all appeals filed by the assessee.

In conclusion, the late fee for delayed TDS statements could not be levied for periods before 1st June 2015, as per the legal analysis and precedents cited. Hence, the appeals were allowed, and the late fees imposed were deleted.

Order pronounced on 17/12/2019.

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