Appeal allowed: Late fee under section 234E not valid during TDS statement processing. Assessing Officer's fee deleted.

The Tribunal allowed the appeal, ruling that the levy of late fee under section 234E during the processing of the TDS statement under section 200A was not legally permissible before the relevant amendment. The fee imposed by the Assessing Officer was deemed beyond the scope of adjustments allowed under section 200A at the time of the intimation. Consequently, the Tribunal deleted the fee levied under section 234E, emphasizing the statutory limitations pre-amendment.

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Issues:
Levy of late fee under section 234E of the Income Tax Act, 1961 during the processing of TDS statement under section 200A.

Analysis:
The appeal pertains to a partnership firm's challenge against the confirmation of late fee levy under section 234E for delayed filing of TDS return for the financial year 2012-13. The firm's contention was that the Assessing Officer (AO) did not have the authority to levy the fee under section 234E before the amendment to section 200A of the Act. The AO had charged a late fee of Rs. 24,000 under section 234E based on the intimation dated 11th February, 2014. The firm relied on judgments from Chennai, Amritsar, and Ahmedabad benches of the Tribunal to support its argument.

During the appeal hearing, the firm was not present, but written submissions were considered. The Senior DR supported the order of the CIT (A) upholding the fee levy. The Tribunal examined the written submissions, relevant statutory provisions, and amendments to section 200A. It highlighted that prior to 1st June 2015, section 200A did not authorize the levy of fees under section 234E during TDS statement processing. The Tribunal emphasized that the scope of adjustments under section 200A was limited to arithmetical errors and incorrect claims apparent from the statement, along with interest computation.

The Tribunal noted that post the June 2015 amendment, section 200A allowed for the computation of the fee under section 234E during TDS statement processing. However, in this case, the intimation was issued before the amendment, and the levy of fees under section 234E was not within the permissible adjustments under section 200A at that time. Citing similar decisions from other benches, the Tribunal concluded that the fee levy under section 234E was beyond the scope of section 200A adjustments. As a result, the Tribunal allowed the appeal and deleted the fee levied under section 234E.

In the final verdict, the Tribunal allowed the appeal of the assessee, emphasizing that the levy of the late fee under section 234E during the processing of the TDS statement under section 200A was not legally permissible before the relevant amendment. The judgment was pronounced on 18th October 2019 by the ITAT Delhi.

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