2019 (11) TMI 1762 - AT - Income Tax

Tribunal allows appeals, sets aside late filing fees for certain assessment years.

M/s K.D. Realties Pvt. Ltd. Versus Commissioner of Income Tax-Appeals-1, Thane

The Tribunal allowed the appeals for Assessment Years (A.Y.) 2013-14, 2014-15, and 2015-16, setting aside the late filing fees imposed under Section 234E ... Levy of late fees u/s 234E - intimation issued u/s 200A on processing of Statement of Tax Deducted at Source - HELD THAT:- We find that the Hon’ble High Court of Karnataka in the case of Fatehraj Singhvi Vs. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT], had concluded, that the notice under Sec.200A of the Act computing fee under Sec.234E, to the extent the same related to the period of the tax deduction prior to 01.06.2015 was liable to be “set aside‟. The aforesaid judgment of the Hon‟ble High Court of Karnataka had thereafter been relied upon in the case of Sonalac Paints & Coating Ltd. [2018 (6) TMI 303 - ITAT CHANDIGARH] As regards the levy of fees u/s 234E for A.Y. 2016-17 is concerned, we find that as the statements of TDS for the first quarter therein involved was to be filed latest by 15.07.2015, i.e. subsequent to the cut off period of 01.06.2015 (the date on which the section enabling levy of fees u/s 234E was made available in Sec.200A), therefore, no infirmity arises from the imposition of the aforesaid fees in the hands of the assessee. As observed A.R had admitted that he is not assailing the levy of fees u/s 234E insofar the delay involved in filing of the statement of TDS for A.Y. 2016-17 is concerned. Thus in terms of our aforesaid observations the fees levied by the ACIT, CPC, Ghaziabad u/s 234E for A.Y. 2013-14, 2014-15 and A.Y. 2015-16 cannot be sustained and is thus deleted. - Decided in favour of assessee. Issues Involved:1. Levy of fees under Section 234E of the Income Tax Act, 1961.2. Validity of fees levied for Assessment Years (A.Y.) 2013-14 to 2016-17.3. Applicability of Section 200A for processing TDS returns prior to 01.06.2015.Issue-Wise Detailed Analysis:1. Levy of Fees under Section 234E:The assessee company delayed filing the TDS statements for A.Y. 2013-14 to A.Y. 2016-17. Consequently, the Assistant Commissioner of Income Tax, Central Processing Cell-TDS levied late filing fees under Section 234E of the Income Tax Act, 1961. The fees were imposed for various quarters, resulting in significant penalties for the assessee.2. Validity of Fees Levied for A.Y. 2013-14 to A.Y. 2016-17:The assessee contested the imposition of late filing fees under Section 234E before the CIT(A), who dismissed the appeals. The assessee further appealed to the ITAT, arguing that the section enabling the levy of fees under Section 234E was incorporated into Section 200A effective from 01.06.2015. Therefore, the fees levied for A.Y. 2013-14 and A.Y. 2014-15 were argued to be invalid. The assessee supported this argument with several judicial pronouncements, including the Hon'ble High Court of Karnataka's judgment in Fatehraj Singhavi & Ors. Vs. Union of India & Ors., which stated that fees under Section 234E could not be charged for periods before 01.06.2015.3. Applicability of Section 200A for Processing TDS Returns Prior to 01.06.2015:The Tribunal considered the judicial precedents, including the ITAT's decisions in similar cases, which concluded that fees under Section 234E could not be levied for periods before the amendment in Section 200A effective from 01.06.2015. The Tribunal noted that the Hon'ble High Court of Karnataka and other ITAT benches had consistently held that such fees were without authority of law for periods prior to 01.06.2015.Judgment:The Tribunal found merit in the assessee's argument and judicial precedents. It concluded that the ACIT-TDS, CPC Ghaziabad, erred in levying fees under Section 234E for the quarters prior to 01.06.2015 for A.Y. 2013-14, 2014-15, and 2015-16. Therefore, the Tribunal set aside the CIT(A)'s order and vacated the demand raised under Section 234E for these years.For A.Y. 2016-17, the Tribunal upheld the levy of fees under Section 234E, as the statements of TDS were filed after 01.06.2015, making the fees valid under the amended Section 200A. The assessee admitted to the delay and did not contest the fees for this year.Result:- Appeals for A.Y. 2013-14, 2014-15, and 2015-16 were allowed, and the fees levied under Section 234E were deleted.- Appeal for A.Y. 2016-17 was dismissed, and the fees levied were upheld.Order Pronounced:The order was pronounced in the open court on 15.11.2019.