ITAT Mumbai: Late fees under IT Act not applicable pre-2015 for TDS returns The Appellate Tribunal ITAT Mumbai ruled in favor of the assessee, holding that late fees under section 234E of the Income Tax Act cannot be levied for ...
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ITAT Mumbai: Late fees under IT Act not applicable pre-2015 for TDS returns
The Appellate Tribunal ITAT Mumbai ruled in favor of the assessee, holding that late fees under section 234E of the Income Tax Act cannot be levied for TDS returns filed before 01/06/2015. The Tribunal directed the Assessing Officer to delete the late fees imposed for belated filing of TDS statements in form 24Q for quarters ending before the specified date, overturning the decisions of lower authorities. The judgment, issued on 22/01/2020, cited conflicting precedents but ultimately supported the assessee's position regarding the retrospective application of the relevant amendment.
Issues: - Levy of late fees u/s 234E of the Income Tax Act, 1961 for belated filing of TDS returns. - Applicability of late filing fee u/s 234E for TDS returns filed prior to 01/06/2015.
Analysis: 1. The case involved appeals against the Commissioner of Income tax (Appeals)'s order for the AY 2013-14 regarding the levy of late fees u/s 234E of the Income Tax Act, 1961 for belated filing of TDS returns. The appeals were heard together due to identical facts and common issues.
2. The assessee challenged the levy of late filing fee u/s 234E, arguing that the amendment to section 200A, effective from 01/06/2015, did not apply to TDS returns filed before that date. The assessee cited relevant case laws but the CIT(A) upheld the levy, stating that the statutory levy is mandatory when a late filing default occurs, even if an automated system accepts the returns.
3. During the hearing, the assessee relied on the decision of the Karnataka High Court and an ITAT Mumbai case to support their argument that the amendment to section 200A should apply prospectively from 01/06/2015. The Revenue, however, supported the CIT(A)'s decision based on a similar ruling by the Gujarat High Court.
4. The Tribunal noted conflicting decisions by different High Courts and ITATs on the issue. It referenced various cases, including decisions favoring both the assessee and the revenue. Ultimately, the Tribunal concluded that the late fee u/s 234E cannot be levied for TDS returns filed before 01/06/2015, as the amendment to section 200A did not authorize such levy before that date.
5. Consequently, the Tribunal directed the Assessing Officer to delete the late fee levied u/s 234E for the belated filing of TDS statements in form 24Q for the relevant quarters ending before 01/06/2015. The appeals filed by the assessee were allowed, overturning the decisions of the lower authorities.
6. The judgment was pronounced on 22/01/2020 by the Appellate Tribunal ITAT Mumbai, with detailed analysis and references to legal precedents supporting the decision to delete the late fees levied u/s 234E for TDS returns filed prior to 01/06/2015.
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