2020 (1) TMI 775 - AT - Income Tax

Tribunal invalidates fees pre-2015, deems 2018 order time-barred

The Tribunal allowed the appeals filed by the assessee, holding that the fees levied under section 234E for periods prior to the amendment by Finance Act ... Levy of late filing fee u/s. 234E against the order passed u/s. 200A - Late filing of TDS returns - scope of amendment - HELD THAT:- As decided in M/s WITS INTERIOR PVT. LTD., NEW DELHI [2018 (5) TMI 1960 - ITAT DELHI] the issue before the Hon’ble Bombay High Court in the case of Rashmikant Kundalia [2015 (2) TMI 412 - BOMBAY HIGH COURT] was with respect to constitution validity of the section introduced by Finance Act, 2015 w.e.f. 01/06/2015 but was not abreast of the applicability of section 234E of the Act by the AO while processing TDS statement. So far as in LAKSHMINIRMAN BANGALORE PVT. LTD. AND OTHERS [2015 (8) TMI 379 - KARNATAKA HIGH COURT] it was held that intimation raising demand prior to 01/06/2015, u/s 200A of the Act, levying fee u/s 234E, is not valid’. Respectfully following the aforesaid decision of the Coordinate Bench, hold that amendment in section 200A(1) of the Act is procedural in nature, therefore, the AO while processing the TDS statements, returns in the present set of appeals of the period prior to 01/06/2015, was not empowered to charge fee u/s 234E of the Act, hence, the intimation issued by the Assessing Officer u/s 200A in the appeals before us, does not stand, therefore, the demand raised by way of charging fee u/s 234E is not valid, resultant, the same is deleted as the intimation issued by the Assessing Officer in the present case, for the period prior to 01/06/2015, is beyond the scope of adjustment provided u/s 200A of the Act. Thus, the appeals of the assessee are allowed. Issues Involved:1. Validity of levying fees under section 234E prior to the amendment by Finance Act 2015 in section 200A effective from 01/06/2015.2. Whether the order under section 200A dated 08/01/2018 is time-barred and beyond the purview of law.Detailed Analysis:Issue 1: Validity of Levying Fees under Section 234E Prior to AmendmentThe primary issue raised by the assessee was the validity of the fees levied under section 234E for late filing of TDS statements before the amendment in section 200A by the Finance Act 2015, effective from 01/06/2015. The assessee argued that prior to this amendment, there was no provision in section 200A to levy such fees, and therefore, any fees levied for periods before this date were invalid.The Tribunal examined the statutory provisions and various judicial precedents, including the decisions of different Benches of ITAT and High Courts. It was noted that section 234E, which was introduced by the Finance Act 2012, provided for a fee for late filing of TDS statements. However, the mechanism to levy this fee was not included in section 200A until the amendment by the Finance Act 2015.The Tribunal referred to the decision in the case of Samikaran Learning Private Limited vs. TDS Officer, which held that the power to levy fees under section 234E while processing TDS returns was given to the Assessing Officer only from 01/06/2015. The Tribunal also cited the decision of the Hon'ble Karnataka High Court in Fatheraj Singhvi v. Union of India, which quashed the intimation issued under section 200A levying fees under section 234E for periods prior to 01/06/2015.In light of these precedents, the Tribunal concluded that the Assessing Officer did not have the authority to levy fees under section 234E for periods before 01/06/2015. Consequently, the fees levied for the assessment years 2013-14 to 2015-16 were deemed invalid.Issue 2: Time-Barred Order under Section 200AThe second issue raised by the assessee was whether the order under section 200A dated 08/01/2018 was time-barred and beyond the purview of law. The Tribunal noted that the intimation under section 200A must be issued within one year from the end of the financial year in which the TDS statement is filed.The Tribunal found that the intimation issued on 08/01/2018 was beyond the prescribed time limit and therefore, was time-barred. This finding was consistent with the statutory provisions and the judicial precedents cited.Conclusion:The Tribunal allowed the appeals filed by the assessee, holding that:1. The fees levied under section 234E for periods prior to the amendment by Finance Act 2015 were invalid, as the Assessing Officer did not have the authority to levy such fees before 01/06/2015.2. The order under section 200A dated 08/01/2018 was time-barred and beyond the purview of law.The Tribunal's decision was based on a thorough examination of the statutory provisions, judicial precedents, and the arguments presented by both parties. The appeals were allowed, and the additions in dispute were deleted.