2019 (6) TMI 664 - AT - Income Tax

Invalid intimation under Section 200A/154 for pre-6/2015 fees; appeals allowed, fees deleted.

M/s. Estee Auto Pressings Pvt. Ltd. Versus The Assistant Commissioner of Income Tax, CPC – TDS, Ghaziabad, U.P.

The Tribunal held that the intimation issued under Section 200A/154, levying fees under Section 234E for periods before 1-6-2015, was invalid. ... Late filing fee u/s 234E - exercise of power u/s 200A - scope of amendment - HELD THAT:- The issue in the present appeal is decided in favour of the assessee by the decision of Hon’ble Karnataka High Court in the case of Fatheraj Singhvi & Ors vs. Union of India & Ors. [2016 (9) TMI 964 - KARNATAKA HIGH COURT , when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent-authority for intimation for payment of fee under Section 234E can be said as without any authority of law and the same are quashed and set aside to that extent - decided in favour of assessee. Issues Involved:1. Levy of Fee under Section 234E.2. Authority of Intimation under Section 200A/154 for periods prior to 1-6-2015.Detailed Analysis:1. Levy of Fee under Section 234E:The primary issue raised by the appellant was the legitimacy of the fee levied under Section 234E of the Income Tax Act, 1961, for the late filing of TDS statements. The appellant contended that the intimation under Section 200A/154 levying the fee was without authority of law, as the amendment to Section 200A, which permits such a levy, came into effect only on 1-6-2015 and should have prospective effect. The appellant relied on several judicial precedents, including Fatheraj Singhvi v. Union of India and Smt. G. Indhirani v. Deputy Commissioner of Income-tax, to support their claim that the fee computation under Section 234E for periods prior to 1-6-2015 was invalid.2. Authority of Intimation under Section 200A/154 for periods prior to 1-6-2015:The Tribunal examined the facts of the case, noting that the appellant had filed the quarterly TDS statement belatedly on 15.01.2017, which was processed on 17.01.2017, resulting in a late fee of Rs. 57,800 under Section 234E. The appellant's appeal to the CIT(A) was dismissed, prompting the current appeal.The Tribunal referred to the decision of the Hon’ble Karnataka High Court in Fatheraj Singhvi & Ors vs. Union of India & Ors, which held that Section 234E, although effective from 1st July 2012, could not be enforced through Section 200A until the amendment effective from 1-6-2015. The High Court ruled that the mechanism for fee computation and demand under Section 200A was substantive and not merely regulatory, thus having prospective effect. Consequently, any demand for fees under Section 234E for periods prior to 1-6-2015 was without authority and invalid.The Tribunal also cited a Co-ordinate Bench decision in Shri. G. Radhakrishnan vs. DCIT, which reinforced that intimation under Section 200A for periods before 1-6-2015, levying fees under Section 234E, was invalid due to the absence of enabling provisions at the relevant time.Conclusion:Respecting the precedents, the Tribunal concluded that the intimation issued by the Assessing Officer under Section 200A/154, levying fees under Section 234E for the period prior to 1-6-2015, was invalid. Therefore, the appeals filed by the assessee were allowed, and the fees levied were ordered to be deleted.Order Pronounced:The appeals filed by the assessee were allowed, and the order was pronounced on 11th June 2019 at Chennai.