2022 (2) TMI 1404 - AT - Income Tax

Tribunal Rules Late Fee u/s 234E Not Applicable for Pre-June 2015 TDS Returns; Directs Fee Deletion for 2014-15.

The Tribunal concluded that the late fee under section 234E of the Income Tax Act could not be levied for quarterly TDS returns filed before 01.06.2015, ... Levy of late filing fee u/s 234E - fee levied for the period prior to 01.06.2015 - assessee has filed TDS Quarterly returns in Form 24Q/26Q beyond due date specified under the Act - HELD THAT:- We find that the assessment year involved is prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid. Hence, by following the decision of Fatheraj Singhvi v. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Decided in favour of assessee. Issues:Levy of late filing fee under section 234E of the Income Tax Act for TDS quarterly returns filed beyond the due date specified under the Act.Analysis:The appeal was filed against orders passed by the Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre relevant to the assessment year 2015-16. The Assessing Officer had assessed TDS quarterly returns filed by the assessee under section 200A and levied late filing fee under section 234E of the Income Tax Act for the delay in filing the said statements. The primary issue to be resolved was whether the Assessing Officer could levy late fee under section 234E of the Act for quarterly returns filed prior to 01.06.2015, when the law was amended to enable the computation of late fee while processing TDS returns under section 200A of the Act. The provision of section 234E of the Act, inserted by the Finance Act, allows for the levy of late fee for belated filing of quarterly returns by the tax deductor. The Assessing Officer began levying late fees under section 234E while processing TDS returns and issuing intimation to the assessees, leading to challenges in various courts regarding the validity of the provision.The Hon'ble Karnataka High Court and the Hon'ble Kerala High Court held that in the absence of an enabling provision in section 200A of the Act, the Assessing Officer cannot levy late fee under section 234E while processing quarterly TDS returns filed before 01.06.2015. Subsequent decisions by various Tribunal Benches also supported this view, stating that late fees under section 234E cannot be levied for periods before 01.06.2015 due to the lack of an enabling provision. In the present case, since the assessment year was prior to 01.06.2015, the late fee charged by the Assessing Officer under section 234E while processing quarterly TDS returns under section 200A was deemed unauthorized and invalid. By following the decision of the Hon'ble Karnataka High Court, the Tribunal concluded that the late fee could not be levied for the financial year 2014-15. Therefore, the Assessing Officer was directed to delete the late fee charged under section 234E in the intimation issued for the processing of quarterly TDS returns.In conclusion, the appeal filed by the assessee was allowed, and the late fee charged under section 234E of the Act for the financial year 2014-15 was directed to be deleted by the Assessing Officer.