2022 (8) TMI 1398 - AT - Income Tax

Appeals Allowed for Late Fees on TDS Returns Pre-2015

The Tribunal allowed the appeals filed by the assessees, ruling in their favor, as the levy of late fees for belated TDS returns before 01.06.2015 under ... Levy of late fee u/s 234E - Intimation u/s 200A - period prior to 01.06.2015 - assessee’s branches filed TDS returns in Form No. 26Q and Form No. 24Q for various quarters belatedly - scope of amendment - HELD THAT:- Prior to 01.06.2015, there was no enabling provision in section 200A of the Act for making adjustment in respect of statement filed by the assessee with regard to tax deducted at source by levying fees u/s 234E - The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fees u/s 234E with effect from 01.06.2015. As decided in Olari Little Flower Kuries (P.) Ltd. [2022 (2) TMI 1061 - KERALAHIGH COURT] has held that since provision of section 200A of the I.T. Act was amended to enable computation of fee payable u/s 234E of the I.T. Act at the time of processing of return and said amendment came into effect from 01.06.2015 (in view of CBDT Circular No.19 of 2015 dated 17.11.2015) intimations issued u/s 200A of the I.T. Act dealing with fee for belated filing of TDS returns for the period prior to 01.06.2015 were invalid and were to be set aside. Also amendment relating to section 200A of the I.T. Act is prospective with effect from 01.06.2015 [See RAJESH KOURANI VERSUS UNION OF INDIA, AND 4 [2017 (7) TMI 458 - GUJARAT HIGH COURT] - Decided in favour of assessee. Issues involved:Whether the CIT(A) erred in confirming the Assessing Officer's order u/s 200A of the I.T. Act, levying late fees u/s 234E of the I.T. Act for various quarters.Analysis:1. Delay in filing appeals:The Registry noted delays in filing the appeals, ranging from 40 to 200 days. However, the Hon'ble Apex Court excluded the period from 15.03.2020 to 28.02.2022 due to the pandemic situation. The appeals were filed within the limitation period set by the Hon'ble Apex Court, hence no delay was found.2. Issue raised in appeals:The main issue in all appeals was whether the CIT(A) erred in confirming the Assessing Officer's order levying late fees u/s 234E of the I.T. Act for belated filing of TDS returns by the assessee's branches.3. Background and facts:The assessee, a Regional Rural Bank in Kerala, had its branches file TDS returns belatedly for various quarters. The Assessing Officer imposed fees and interest u/s 234E r.w.s. 200A of the I.T. Act for late filing of Form 26Q and 24Q.4. Judicial precedents and arguments:The assessee cited various judicial pronouncements in their favor, including judgments from the Hon'ble Kerala High Court and the Tribunal. The CIT(A) had relied on judgments from the Hon'ble Kerala and Gujarat High Courts to uphold the Assessing Officer's orders.5. Tribunal's analysis and decision:The Tribunal observed that prior to 01.06.2015, there was no provision in section 200A of the Act to levy fees u/s 234E for belated TDS returns. Citing the judgment of the Hon'ble Kerala High Court, the Tribunal held that the levy of late fees for the relevant quarters cannot be sustained in orders passed u/s 200A before 01.06.2015. The Tribunal also noted that the judgments cited by the CIT(A) did not address the retrospective effect of the amendment to section 200A from 01.06.2015.6. Conclusion:Based on the analysis of judicial precedents and legal provisions, the Tribunal allowed the appeals filed by the assessees, ruling in their favor. The orders were pronounced on 1st August 2022.This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by both parties, and the legal reasoning behind the Tribunal's decision.