2022 (8) TMI 1356 - AT - Income Tax

ITAT Chennai rules no late fees before 01.06.2015

The ITAT Chennai allowed the appeal, holding that late fees under section 234E were not applicable for periods before 01.06.2015. The decision was based ... Levy of late fees u/s.234E - assessee had filed TDS return for Quarter 3 by delay - intimation issued by AssessingOfficer under section 200A for period prior to 01.06.2015 - HELD THAT:- AO has levied late fees u/s.234E of the Act for the AY 2013-14. Thus, it was levied for period prior to 01.06.2015. Therefore, respectfully following the decision of ITAT Pune Bench in the case of Medical Superintendent Rural Hospital DOBI BK [2018 (10) TMI 1587 - ITAT PUNE], which in turn has relied on the decision of Hon’ble Karnatak High Court in the case of Fateraj Singhvai [2016 (9) TMI 964 - KARNATAKA HIGH COURT] we hold that the late fees u/s.234E of the Act, is not applicable for period prior to 01.06.2015. Accordingly, the AO is directed to delete the late fees levied u/s.234E of the Act for the Quarter 3 of FY 2012-13 ( AY 2013-14).Appeal filed by the assessee is allowed. Issues:1. Levy of late fees u/s.234E of the Income Tax Act for FY 2012-13 Quarter 3.2. Applicability of late fees u/s.234E for the period prior to 01.06.2015.Issue 1: Levy of Late Fees u/s.234E:The appeal was against the order of the Commissioner of Income Tax (Appeals) regarding the levy of late fees u/s.234E for the FY 2012-13 Quarter 3. The appellant contended that the Assessing Officer erred in charging a fee of Rs.38,400 while processing the TDS statement. The appellant argued that the provision for charging late fees u/s.234E was introduced by the Finance Act, 2015, effective from 01.08.2015. The appellant further highlighted that prior to 01-06-2015, there was no enabling provision under Section 200A for raising a demand towards late fees u/s.234E. The appellant also pointed out the instructions of the CBDT contained in Circular No. 19 of 2015, emphasizing that late fees for quarterly TDS statements cannot be recovered through processing under section 200A.Issue 2: Applicability of Late Fees u/s.234E:The key contention revolved around the applicability of late fees u/s.234E for the period prior to 01.06.2015. The ITAT Chennai analyzed various precedents, including the decision of the ITAT Pune Bench and the High Court of Karnataka. The ITAT Pune Bench's decision emphasized that the amendment to section 200A of the Act, effective from 01.06.2015, had prospective effect and did not apply to the respective assessment years before that date. The High Court of Karnataka further clarified that notices issued under section 200A for late filing fees under section 234E, relating to periods before 01.06.2015, were invalid. Therefore, the ITAT Chennai held that the late fees u/s.234E were not applicable for periods before 01.06.2015. As the late fees were levied for AY 2013-14, which falls before the specified date, the ITAT directed the Assessing Officer to delete the late fees levied for the Quarter 3 of FY 2012-13.In conclusion, the ITAT Chennai allowed the appeal, emphasizing that the late fees u/s.234E were not applicable for the period prior to 01.06.2015. The decision was based on the prospective nature of the relevant amendment to section 200A of the Act. The ITAT's judgment provided clarity on the issue of late fees levied under the Income Tax Act, ensuring adherence to legal provisions and precedents in determining the appellant's liability.