2020 (7) TMI 812 - AT - Income Tax

ITAT Indore: Late Fees for TDS Statements Incorrectly Levied

The Appellate Tribunal ITAT Indore allowed 10 appeals in favor of the assessees, ruling that Revenue authorities were incorrect in levying late fees under ... Levy of fee u/s 234E - processing of TDS statement under section 200A - prospective effect of statutory amendments - intimation under section 200A for levy of feeLevy of fee u/s 234E - processing of TDS statement under section 200A - prospective effect of statutory amendments - Levy of fee under section 234E cannot be imposed in statements processed under section 200A for periods prior to the amendment brought into force w.e.f. 01.06.2015. - HELD THAT: - The Tribunal examined whether fees under section 234E could be levied by issuing intimation under section 200A for statements processed before the amendment effective 01.06.2015. Noting that the enabling clause to raise demand for fee under section 234E through section 200A was inserted only by the Finance Act, 2015 with effect from 01.06.2015, the Bench held that the substitution is to be read as prospective and not retrospective. The Tribunal followed earlier coordinate-bench decisions which considered similar facts and held that in the absence of an enabling provision in section 200A prior to 01.06.2015 the revenue had no power to levy fee u/s 234E by way of intimation under section 200A. Reliance was placed on several precedents of the Tribunal (including Indore School of Social Work and others) and on the principle that statutory amendments creating new liabilities are prospective unless expressly or by necessary implication made retrospective. In view of these precedents and reasoning, the Tribunal concluded that the Commissioner (Appeals) erred in confirming the levy and directed deletion of the fee in the appeals before it. [Paras 8, 9, 11, 12]Findings of the Commissioner (Appeals) confirming levy of fee u/s 234E in statements processed u/s 200A for periods before 01.06.2015 are reversed and the levy is deleted; appeals allowed.Final Conclusion: All ten appeals by the assessees are allowed: levy of late fee under section 234E made by intimation under section 200A for periods prior to the amendment effective 01.06.2015 is not sustainable and is directed to be deleted. Issues involved:Whether the Revenue authorities were justified in levying late fees u/s 234E of the Act while processing the statement of tax deducted at source u/s 200A of the Act before the amendment brought in w.e.f. 01.06.2015 in the provisions of section 200A of the Act.Analysis:The judgment by the Appellate Tribunal ITAT Indore involved a bunch of 10 appeals by different assessees against the orders of the Commissioner of Income Tax (Appeals) of Indore. The main issue in all these appeals was whether the Revenue authorities were correct in levying late fees under section 234E of the Income Tax Act while processing the TDS statements under section 200A of the Act before the amendment introduced on 01.06.2015. The Tribunal heard all the appeals together due to the similarity of the issue for convenience and brevity.The common facts in all the appeals were that the appellants failed to file the TDS statements within the prescribed due date, leading to the imposition of late fees under section 234E of the Act by the Revenue authorities during the processing of the TDS statements under section 200A. The assessees contended that before the amendment in 2015, the Revenue authorities did not have the power to levy late fees under section 234E in the statements processed under section 200A of the Act.The Tribunal considered the arguments presented by both sides and reviewed various judicial pronouncements. It noted that a similar issue had been decided in favor of the assessee in a previous case by the Coordinate Bench, Indore. The Tribunal found that the issue was squarely covered in favor of the assessees based on previous decisions and observed that the Revenue authorities erred in confirming the levy of late fees under section 234E of the Act in the statements processed under section 200A before the 2015 amendment.Additionally, the Tribunal referenced a decision by the Co-ordinate Bench Agra in a different case, which also favored the assessee on a similar issue. The Tribunal highlighted that the enabling clause for levying late fees under section 234E was inserted in section 200A of the Act only from 01.06.2015 onwards. Therefore, the Tribunal concluded that the Revenue authorities were incorrect in confirming the late fee levied by the assessing officer and directed the Revenue to delete the levy of fees under section 234E in all the cases.Ultimately, the Tribunal allowed all 10 appeals in favor of the assessees, reversing the findings of the Commissioner of Income Tax (Appeals) and directing the deletion of the late fees imposed under section 234E of the Act in all the cases.