Tribunal Upholds Late Filing Fees u/s 234E; Partly Allows TDS Appeal, Deleting Fees for Transactions Below Rs. 50 Lakh.

The tribunal dismissed the appeal challenging late filing fees under Section 234E, aligning with the Gujarat HC's precedent that Section 234E is a charging provision independent of Section 200A. However, the tribunal partly allowed the appeal concerning TDS under Section 194IA(1), directing the deletion of late fees, concluding that TDS provisions apply per transferee if consideration is below Rs. 50 lakhs.

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Issues:
1. Challenge to late filing fees under Section 234E r.w.s. 204 of the Income Tax Act.
2. Applicability of TDS under Section 194IA(1) for transfer of immovable property.

Issue 1: Challenge to late filing fees under Section 234E r.w.s. 204 of the Income Tax Act:

The appeal was filed against the order of the Commissioner of Income Tax (Appeals) concerning the imposition of late filing fees of Rs. 4,39,245 for the financial year 2013-14. The Assessee contended that Section 200A of the Income Tax Act is a machinery provision and does not create any charge, thus questioning the levy of fees under Section 234E without a regulatory provision in Section 200A. However, the Hon'ble Gujarat High Court ruled in a similar case that Section 234E is a charging provision and can be levied independently of Section 200A. Based on this precedent, the tribunal declined to interfere with the Revenue's action, dismissing the main grounds of appeal.

Issue 2: Applicability of TDS under Section 194IA(1) for transfer of immovable property:

The Assessee raised an additional ground challenging the obligation to deduct TDS under Section 194IA(1) for property transfers below Rs. 50 lakhs to each transferee. The argument was that TDS should be applicable per transferee and not based on the aggregate value of the property. The tribunal admitted this ground and considered the case law where it was held that Section 194IA applies to each transferor individually, and if the consideration paid to any transferor is below Rs. 50 lakhs, the TDS provisions do not apply. In line with this interpretation, the tribunal directed the deletion of late filing fees amounting to Rs. 1,35,000 out of the total imposed late fee of Rs. 4,39,301. Therefore, the appeal was partly allowed based on this ground.

In conclusion, the tribunal addressed the challenges related to late filing fees under Section 234E and the applicability of TDS under Section 194IA(1) for property transfers. The judgment provided clarity on the legal interpretations and upheld the decisions based on relevant precedents and provisions of the Income Tax Act.

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