2019 (11) TMI 1822 - AT - Income Tax

Section 234E late fee amendment from June 2015 applies prospectively, no computation for pre-amendment TDS periods

ITAT Jodhpur ruled that the amendment to Section 234E regarding late fee levy, effective from 01/06/2015, is prospective in nature. The tribunal held that ... Levy of late fee u/s 234E - scope of amendment w.e.f 01/06/2015 - Levy for respective assessment years prior to 01.06.2015 - HELD THAT:- The issue under consideration pertaining to levy of late fee after the amendment w.e.f 01/06/2015 and this issue has been decided against the assessee vide order in Station Headquarters Jodhpur & Others Vs. ACIT & Others [2019 (9) TMI 607 - ITAT JODHPUR] wherein as held that the amendment [clause (c)] was inserted u/s. 200A of the Act which has been given effect from 01.06.2015 is prospective in nature, and no computation of late fee for the demand or the intimation for the late fee u/s. 234E could be made for the TDS deducted for the respective assessment years prior to 01.06.2015. Therefore, the intimation u/s. 200A of the Act by the AO, TDS for payment of late fee u/s. 234E of the Act for the respective assessment years prior to 01.06.2015 is without any authority of law. Appeals of the assessee are dismissed. Issues Involved: Confirmation of levy of late fee under section 234E of the Income Tax Act, 1961.Issue-Wise Detailed Analysis:1. Confirmation of Levy of Late Fee under Section 234E of the Income Tax Act, 1961:The appeals by the Assessee are directed against the common order dated 18/06/2019 of the Ld. CIT(A), Bikaner. The primary issue pertains to the confirmation of the levy of late fee under section 234E of the Income Tax Act, 1961. The appeals were heard together and disposed of by a consolidated order for convenience and brevity.During the hearing, the counsel for the assessee conceded that the issue under consideration pertains to the levy of late fee after the amendment effective from 01/06/2015. This issue has been decided against the assessee in a previous order dated 10/05/2019 in ITA Nos. 492 to 500/Jodh/2018 & others in the case of Station Headquarters Jodhpur & Others Vs. ACIT & Others. The Ld. DR also confirmed that the similar issue has been decided by the Tribunal against the assessee in the aforementioned order.After considering the submissions of both parties and perusing the material available on record, it was noted that the issue has been decided against the assessee. The TDS statements under section 234E were furnished after the amendment by the Finance Bill 2015 effective from 01/06/2015. The relevant findings on the same issue were provided in paragraphs 5 to 6 of the order dated 10/05/2019.The Tribunal noted that the Hon'ble High Court had upheld the constitutional validity of section 234E of the Act, referencing the decision of the Hon'ble Bombay High Court in Rashmikant Kundalia & Ors. Vs. Union of India & Ors. (2015) 229 Taxman 596 (Bom). The High Court had concluded that the imposition of late fees by section 234E was not ultra vires, and the writ petition challenging it had no merits.Further, the Tribunal referred to the detailed analysis in the case of Maharashtra Cricket Association & Ors. Vs. DCIT (2016) 182 TTJ (Pune) 'A' Bench, which held that the power to charge fees under section 234E was vested with the prescribed authority only from 01/06/2015. Prior to this date, the Assessing Officer did not have the authority to charge fees under section 234E while processing TDS returns under section 200A of the Act.The Tribunal also referenced various other decisions, including those of the Amritsar Bench, Chennai Bench, Ahmedabad Bench, and Chandigarh Bench, which supported the view that the levy of fees under section 234E could not be effected in the course of intimation under section 200A prior to 01/06/2015.Additionally, the Tribunal noted the Hon'ble Karnataka High Court's judgment in Sri Fatheraj Singhvi & Ors Vs. Union of India & Ors, which quashed the intimation issued under section 200A levying fees for delayed filing of TDS statements under section 234E, holding that the amendment to section 200A enabling such adjustments was prospective and applicable from 01/06/2015.In conclusion, the Tribunal held that the amendment to section 200A(1) of the Act is procedural and prospective in nature. Therefore, the Assessing Officer was not empowered to charge fees under section 234E for the period prior to 01/06/2015. The intimation issued by the Assessing Officer under section 200A for payment of late fee under section 234E for periods prior to 01/06/2015 was without authority of law. The Tribunal directed the deletion of late fees levied for delays in filing returns before 01/06/2015, while affirming the validity of levying late fees for the period starting from 01/06/2015 to the actual date of filing the TDS return.Judgment:The appeals of the assessee were dismissed, with the Tribunal following the previous order dated 10/05/2019. The order was pronounced in the open Court on 26/11/2019.