2018 (12) TMI 1229 - AT - Income Tax

Tribunal cancels late fees for TDS statements pre-2015 amendment

State Bank of India, (MP) And Ors. Versus DCIT, CPC (TDS), Ghajiabad And Ward -2/1 (TDS) /DCIT (TDS), Bhopal

The Tribunal held that the Revenue authorities were not justified in levying late fees under section 234E of the Income Tax Act while processing TDS ... Levying the late fees u/s 234E while processing the statement of tax deducted at source u/s 200A - scope of amendment brought in the Finance Act 2015 w.e.f. 01.06.2015 - Held that:- This issue has consistently being adjudicated by the Coordinate Bench of the Tribunal and consistent view has been taken that the amendment brought in the Finance Act 2015 w.e.f. 01.06.2015 in clause (c),(d) & (e) of sub-section (1) of section 200A of the Act are prospective in nature, therefore, fee u/s 234E cannot be levied in the statement processed u/s 200A up to 31.05.2015. See SUDARSHAN GOYAL VERSUS DCIT- (TDS) , GHAZIABAD. [2018 (5) TMI 1626 - ITAT AGRA] Thus in the intimation prepared u/s 200A of the Act up to 31st May 2015, the late filing fee u/s 234E of Act cannot be charged while processing the TDS return/statement because enabling clause (c) of sub-section (1) of section 200A have been inserted w.e.f. 01.06.2015 and before this amendment w.e.f 01.06.2015 there was no enabling provision in the Act u/s 200A of the Act for raising demand in respect of levy of fees u/s 234E of the Act. - Decided in favour of assessee Issues Involved:- Whether the Revenue authorities were justified in levying late fees under section 234E of the Income Tax Act while processing the statement of tax deducted at source (TDS) under section 200A of the Act before the amendment effective from 01.06.2015.Issue-Wise Detailed Analysis:1. Levy of Late Fees under Section 234E:The primary issue in all 56 appeals was whether the Revenue authorities were justified in levying late fees under section 234E of the Income Tax Act while processing the TDS statement under section 200A before the amendment effective from 01.06.2015. The appellants argued that before the amendment by the Finance Act, 2015, the Revenue authorities did not have the power to levy late fees under section 234E in the statement processed under section 200A.2. Common Facts:The appellants failed to file the TDS statement within the prescribed due date, leading to the imposition of late fees under section 234E. The Revenue authorities charged the late fees while processing the TDS statement under section 200A. The appellants contended that the amendment effective from 01.06.2015, which allowed for the levy of late fees under section 234E in the statement processed under section 200A, was prospective and not retrospective.3. Tribunal's Consistent View:The Tribunal consistently held that the amendment brought by the Finance Act, 2015, effective from 01.06.2015, in section 200A was prospective. Therefore, late fees under section 234E could not be levied in the statements processed under section 200A for the period before 01.06.2015. This view was supported by several decisions of the Coordinate Bench and the Hon'ble High Courts, including the Karnataka High Court in the case of Fatehraj Singhvi vs. UOI and the Gujarat High Court in the case of Rajesh Kaurani vs. UOI.4. Judicial Precedents:The Tribunal referred to multiple judicial precedents, including:- Mentor India Limited vs. DCIT: The Tribunal followed the decision favoring the assessee, holding that the amendment in section 200A was prospective.- Sudershan Goyal vs. DCIT (TDS): The Tribunal held that late fees under section 234E could not be levied for TDS statements processed under section 200A before 01.06.2015.- State Bank of India, Gwalior vs. CIT(A): The Tribunal reiterated that the amendment in section 200A was prospective and not retroactive.5. Legal Interpretation:The Tribunal emphasized the principle of statutory interpretation that unless expressly provided, a provision is presumed to have prospective effect. This principle was upheld by the Hon'ble Supreme Court in CIT vs. Vatika Township Pvt. Ltd., which the Tribunal followed in its judgments.6. Departmental Representative's Position:The Departmental Representative failed to controvert the submissions made by the appellants' counsel, and the Tribunal found no merit in the Revenue's arguments.7. Tribunal's Conclusion:The Tribunal concluded that the CIT(A) erred in confirming the levy of late fees under section 234E for the period before the amendment effective from 01.06.2015. The Tribunal set aside the findings of the CIT(A) and allowed the appeals in favor of the assessee, canceling the levy of late fees under section 234E.8. Final Order:The Tribunal allowed all 56 appeals of the assessee, ruling that late fees under section 234E could not be levied for TDS statements processed under section 200A before 01.06.2015.Pronouncement:The order was pronounced in the open court on 13.11.2018.