Invalidity of Late Filing Fees Pre-2015 Ruling

The ITAT held that the AO, prior to 01.06.2015, lacked the authority to levy late filing fees under Section 234E while processing TDS statements. The amendment to Section 200A was deemed procedural, and the power to charge fees under Section 234E only applied from 01.06.2015. Consequently, the demand for fees under Section 234E was deemed invalid, leading to the deletion of penalties and allowing the appeals of the assessees.

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Issues Involved:
1. Confirmation of charging of late filing fees levied by the AO under Section 234E of the Income Tax Act, 1961.
2. Applicability of amendments to Section 200A of the Income Tax Act, 1961, effective from 01.06.2015, for levying fees under Section 234E.

Issue-Wise Detailed Analysis:

1. Confirmation of Charging of Late Filing Fees Levied by the AO Under Section 234E:

The common grievance of the assessees relates to the confirmation of late filing fees levied by the AO under Section 234E of the Income Tax Act, 1961. The AO charged the impugned late fees under Section 234E, and the assessees contended that the amendment to Section 200A, which allows for the computation of fees under Section 234E, came into effect from 01.06.2015. Therefore, any levy of fees for periods prior to this amendment was not tenable.

The CIT(A) upheld the AO's decision, relying on the judgment of the Hon’ble Bombay High Court in Rashmikant Kundalia Vs Union of India, which upheld the constitutional validity of Section 234E. However, the assessees argued that the facts of the cases relied upon by the CIT DR were different and not applicable to their cases.

2. Applicability of Amendments to Section 200A Effective from 01.06.2015:

The ITAT considered the submissions and noted that an identical issue had been adjudicated in the case of M/s Samikaran Learning Pvt. Ltd. Vs TDS Officer, where it was held that the power to charge fees under Section 234E while processing TDS statements was vested with the prescribed authority only from 01.06.2015.

Before this date, the AO did not have the authority to levy fees under Section 234E while issuing intimation under Section 200A. The Tribunal emphasized that once any provision of the Act is made applicable from a specific date, it cannot be applied retrospectively unless explicitly stated. The amendment was procedural, and the AO's power to levy fees under Section 234E came into effect only from 01.06.2015.

The Tribunal also referred to various decisions, including the Pune Bench in Gajanan Constructions and the Karnataka High Court in Fatheraj Singhvi v. Union of India, which held that intimation raising demand prior to 01.06.2015 under Section 200A levying fees under Section 234E is not valid.

Conclusion:

The ITAT concluded that the amendment to Section 200A of the Act is procedural and the AO, while processing TDS statements for periods prior to 01.06.2015, was not empowered to charge fees under Section 234E. Consequently, the demand raised by the AO by way of charging fees under Section 234E was not valid, and the impugned penalties were deleted. The appeals of the assessees were allowed.

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