2020 (1) TMI 75 - AT - Income Tax

ITAT Mumbai cancels late filing fees under Sec.234E pre-2015, allows appeal delay with valid reasons.

The ITAT Mumbai set aside the CIT(A)'s order and deleted the late filing fees imposed under Sec.234E, based on the legal position that such fees for ... Late filing fees imposed under Sec.234E - assessee had delayed the filing of the statement of the tax deducted at source in “Form No. 26Q” for the third quarter for financial year 2012-13 - HELD THAT:- Hon’ble High Court of Karnataka in the case of Fatehraj Singhavi Vs. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] had concluded that the notice under Sec.200A computing the fee under Sec. 234E, to the extent the same was levied in respect of the period of tax deduction prior to 01.06.2015 was liable to be ‘set aside’ Fees under Sec.234E has been levied in respect of the delay on the part of the assessee for filing her TDS return in “Form 26Q” for the third quarter of financial year 2012-13 i.e the period prior to 01.06.2015 (the cut of date from which the amendment enabling levy of fees under Sec. 234E was made available in Sec.200A,therefore, we are of the considered view, that in the backdrop of the aforesaid settled position of law, as per which, in the course of the processing of a statement of tax deducted at source under Sec.200A no fees under Sec.234E could be charged for the period prior to 01.06.2015, the aforesaid fees for late filing of TDS statement by the assessee cannot be sustained and is liable to be vacated. Accordingly, we set aside the late filing fee under Sec.234E of ₹ 4,600/- levied by the A.O in the case before us. Resultantly, the order of the CIT(A) is set aside and the late filing fees of ₹ 4,600/- imposed under Sec.234E is deleted - Decided in favour of assessee. Issues:1. Delay in filing of statements of tax deduction at source for the third quarter for A.Y. 2013-14.2. Imposition of late filing fees under Sec.234E.3. Assessment of the delay in filing the appeal.4. Merits of the case regarding the late filing fee under Sec.234E for the period prior to 01.06.2015.1. Delay in filing of statements of tax deduction at source:The appeal was filed against the order passed by CIT(A)-9, Mumbai, arising from an intimation received under Sec.200A of the Income Tax Act, 1961. The delay in filing the TDS statements for the third quarter of A.Y. 2013-14 resulted in the imposition of late filing fees under Sec.234E by the ACIT, Central Processing Cell-TDS.2. Imposition of late filing fees under Sec.234E:The CIT(A) upheld the imposition of late filing fees under Sec.234E, dismissing the appeal of the assessee. The delay was calculated to be 3 years and 2 months, contrary to the assessee's claim of a 12-day delay. The CIT(A) found no sufficient cause for the substantial delay and declined to condone it.3. Assessment of the delay in filing the appeal:The ITAT Mumbai disagreed with the CIT(A) regarding the delay calculation, determining the delay to be only 12 days. The Tribunal accepted the assessee's explanation for the delay, citing valid reasons. The ITAT set aside the CIT(A)'s decision on condoning the delay, considering the justifiable cause presented by the assessee.4. Merits of the case regarding late filing fee under Sec.234E:The ITAT referred to legal precedents, including the High Court of Karnataka and ITAT decisions, stating that late fees under Sec.234E for periods before 01.06.2015 were not valid. Following these precedents, the ITAT concluded that the late filing fee under Sec.234E of Rs. 4,600 was not sustainable for the period prior to 01.06.2015. Therefore, the late filing fee was deleted, and the appeal of the assessee was allowed.In conclusion, the ITAT Mumbai set aside the CIT(A)'s order and deleted the late filing fees imposed under Sec.234E, based on the legal position that such fees for periods before 01.06.2015 were not valid. The ITAT also condoned the delay in filing the appeal, considering the valid reasons presented by the assessee for the delay.