2022 (12) TMI 1395 - AT - Income Tax

Tribunal rules late fees pre-06/2015 for TDS filings invalid due to lack of statutory provision

The Tribunal held that late fees under section 234E for TDS statement filing delays before 01.06.2015 cannot be imposed retrospectively without a specific ... Late filing fee u/s 234E - intimation u/s 200A - whether late fee and consequential interest could be levied in respect of the TDS statements relating to the period prior to 01/06/2015? - HELD THAT:- There is no dispute that the period covered under all these appeals are prior to 01/06/2015. It is also not in dispute that after noticing the decisions of the Hon'ble Gujarat High Court [2017 (7) TMI 458 - GUJARAT HIGH COURT] Hon'ble Karnataka High Court ([2016 (9) TMI 964 - KARNATAKA HIGH COURT]), and many other decisions of the Co-ordinate Benches of the Tribunal, the Delhi Bench of the Tribunal in the case of Supreme Brahmaputra (JV) [2020 (9) TMI 289 - ITAT DELHI] held that when there are conflicting decisions of various Hon'ble High Courts, in the absence of any view taken by the jurisdictional High Court, while following the decision of the Hon'ble Apex Court in the case of Vegetable Products Ltd.,[1973 (1) TMI 1 - SUPREME COURT] the view in consonance with the plea of the accused has to be taken. Thus we hold that the issue is in favour of the assessee and direct the learned Assessing Officer to delete the addition made under section 234E of the Act. Issues:Levying of late fee u/s 234E for TDS statement filing delay pre-01.06.2015; Applicability of section 234E retrospectively; Interpretation of section 200A; Consistency in tribunal decisions; Benefit of coordinate bench decision post-01.06.2015.Analysis:The appeals concern the imposition of late fees under section 234E for delays in filing TDS statements before 01.06.2015, prior to the insertion of clause (c) of sub-section (1) of section 200A. The substantive provision of section 234E cannot be applied retrospectively without express provision in the Act. The Tribunal noted that until 01/05/2015, no machinery provision existed under section 200A to enable the levy of late fees under section 234E. The absence of such provision restricted the Assessing Officer's power to make adjustments for late fee levy. The Tribunal referenced decisions from various High Courts and Co-ordinate Benches to support its stance, emphasizing the need for a consistent approach in the absence of a jurisdictional High Court view.The Revenue did not present conflicting decisions from the jurisdictional High Court, allowing the Tribunal to follow the view taken by the Hon'ble Karnataka High Court and other Tribunal cases favoring the assessee. Consequently, the Tribunal directed the Assessing Officer to delete the additions made under section 234E for the relevant period pre-01/06/2015, leading to the allowance of the first three appeals.Regarding the appeal specific to the financial year 2015-16 (ITA No.669/Hyd/2022), the Tribunal considered the amendment to section 234E effective from 01/06/2015. The assessee sought the benefit of the coordinate bench decision for April and May 2015, as the amendment only applied from 01.06.2015. The Tribunal, in line with judgments from various High Courts and consistent Tribunal decisions, partly allowed the appeal for the months of April and May 2015, as the amendment was not in force for those months. The late fees for this period were deemed unsustainable due to the effective date of the amendment.In conclusion, the Tribunal allowed the appeals in ITA Nos.666 to 668 and partly allowed the appeal in ITA No.669/Hyd/2022, based on the specific circumstances and effective dates of the relevant provisions.