ITAT Upholds Section 234E Fees for Late Tax Filing

The ITAT Ahmedabad upheld the levy of fees under section 234E for late filing of quarterly tax deduction statements, dismissing all fifteen appeals by the assessee challenging the order under section 154 of the Income Tax Act, 1961. The ITAT ruled that the Assessing Officer had the power to make adjustments under section 234E even before June 2015, based on the jurisdictional High Court's interpretation. The judgment was delivered on 23-03-2018.

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Issues:
- Validity of the impugned order u/s. 154
- Power of the Assessing Officer to make adjustment u/s.234E

Analysis:
1. Validity of the Impugned Order u/s. 154:
The appeals filed by the assessee for A.Y. 2013-14 to 2015-16 challenged the order of the CIT(A)-8, Ahmedabad dated 13-06-2016 under section 154 of the Income Tax Act, 1961. The assessee contended that the CIT(A) erred in not considering the 2nd ground of appeal challenging the validity of the order u/s. 154. The issue revolved around the levy of fees u/s. 234E for delay in filing quarterly statements of deduction of taxes. The CIT(A) dismissed the appeal, stating that the assessing officer rightfully charged fees u/s. 234E. During the appellate proceedings, the assessee provided judicial pronouncements supporting their case. However, the ITAT found that the jurisdictional High Court of Gujarat had held that section 234E is a charging provision, and fees could be levied even without a regulatory provision in section 200A for computation of fees. The ITAT, therefore, dismissed the ground challenging the validity of the order u/s. 154.

2. Power of the Assessing Officer to Make Adjustment u/s.234E:
The second issue raised was whether the Assessing Officer had the power to make adjustments u/s.234E as per the amended provisions of section 200A of the Income Tax Act. The ITAT observed that prior to June 2015, there was no enabling provision for raising a demand regarding the levy of fees u/s. 234E. However, the jurisdictional High Court of Gujarat clarified that section 234E created a charge for levying fees, and it was not necessary to have another provision creating the same charge. The High Court held that even in the absence of section 200A, the revenue could demand and collect fees for late filing of statements. The ITAT, following the High Court's decision, concluded that the Assessing Officer had the power to levy fees u/s. 234E even before June 2015. Therefore, the ITAT dismissed both grounds of appeal raised by the assessee.

In conclusion, the ITAT upheld the levy of fees u/s. 234E for delay in filing quarterly statements of deduction of taxes and dismissed all fifteen appeals filed by the assessee. The judgment was pronounced on 23-03-2018 by the ITAT Ahmedabad.

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