2020 (3) TMI 879 - AT - Income Tax

Revenue authorities cannot levy late fees pre-2015 amendment for TDS statements processed under Section 200A.

M/s. Oswal Computers & AMP Consultants Pvt. Ltd, Indore, M/s. Keshav Industries Pvt. Ltd, Indore, M/s. Padmavati Retail India Pvt. Ltd, Indore Versus ACIT, CPC-TDS Ghaziabad

The Tribunal held that Revenue authorities were not justified in levying late fees under Section 234E of the Income Tax Act for TDS statements processed ... Levy of late fees u/s 234E - statement processed u/s 200A - Justification in confirming the levy of late fee u/s 234E in the statement of tax deducted at source processed u/s 200A even when when the amendment brought in the Finance Act 2015 w.e.f. 01.06.2015 paved the way for levying the fee u/s 234E in the statement processed u/s 200A - HELD THAT:- In the given facts and circumstances of the case as well as following the decisions given by us in the case of State Bank of India, Genda Chowk [2018 (11) TMI 1714 - ITAT INDORE] and M/s. Madhya Pradesh Power Transmission Ltd. & others [2018 (12) TMI 1323 - ITAT INDORE] are of the opinion that in the given set of facts of the instant appeals wherein fee u/s 234E of the Act was levied in the statements processed u/s 200A of the Act before 01.06.2015 i.e. before the amendment brought into effect from 01.06.2015 in section 200A of the Act thereby enabling the revenue authorities to raise demand in respect of levy of fees u/s 234E of the Act. CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings of ld. CIT(A) in all these appeals are reversed and revenue is directed to delete the levy of fees u/s 234E of the Act in all these 4 cases. Thus, common issue raised in all these appeals are decided in favour of the assessee. Issues Involved:1. Whether the Revenue authorities were justified in levying late fees under Section 234E of the Income Tax Act while processing the statement of tax deducted at source (TDS) under Section 200A of the Act before the amendment effective from 01.06.2015.Detailed Analysis:1. Levy of Late Fees under Section 234E Prior to Amendment in Section 200A:The core issue in these appeals is whether the Revenue authorities had the power to levy late fees under Section 234E of the Income Tax Act while processing TDS statements under Section 200A before the amendment effective from 01.06.2015. The appellants failed to file their TDS statements within the prescribed due dates, leading to the imposition of late fees by the Revenue authorities.The appellants contended that before the amendment by the Finance Act, 2015, effective from 01.06.2015, the Revenue authorities lacked the power to levy late fees under Section 234E in the statements processed under Section 200A. This argument was based on the absence of an enabling provision in Section 200A for such a levy prior to the amendment.2. Tribunal’s Consideration of Judicial Precedents:The appellants relied on several decisions of the Coordinate Bench of the Tribunal, which consistently held that the amendment to Section 200A effective from 01.06.2015 was prospective in nature. Consequently, no late fees under Section 234E could be levied for TDS statements processed under Section 200A before this date. Key decisions cited include:- Mentor India Limited vs. DCIT- Sudershan Goyal vs. DCIT (TDS)- State Bank of India, Gwalior vs. CIT(A)- State Bank of India, Genda Chowk and others vs. DCIT(TDS)- M/s. Madhya Pradesh Power Transmission Ltd. & others- Bhupesh Kumar J. Sanghvi & others- Indore School of Social Work & othersThese decisions followed the principle that if there is a cleavage of opinion between different courts, the view favoring the assessee should be adopted. This principle was reinforced by the Hon'ble Supreme Court in CIT vs. Vatika Township Pvt. Ltd. and CIT vs. Vegetable Products Ltd.3. Revenue’s Position:The Departmental Representative (DR) failed to controvert the submissions made by the appellants' counsels. The Tribunal noted that the Revenue authorities did not provide any substantial arguments against the appellants' contentions.4. Tribunal’s Findings:The Tribunal reviewed the rival contentions, judicial precedents, and the specific facts of the cases. It consistently found that the amendment to Section 200A effective from 01.06.2015 was prospective. Therefore, late fees under Section 234E could not be levied for TDS statements processed under Section 200A before this date.The Tribunal referred to its own prior decisions in similar cases, including those involving State Bank of India, Genda Chowk and others, M/s. Madhya Pradesh Power Transmission Ltd. & others, Bhupesh Kumar J. Sanghvi & others, and Indore School of Social Work & others. These decisions consistently held that the enabling provision for levying fees under Section 234E was not applicable before 01.06.2015.5. Conclusion:The Tribunal concluded that the CIT(A) erred in confirming the levy of late fees under Section 234E by the assessing officer for the periods prior to 01.06.2015. The Tribunal reversed the findings of the CIT(A) and directed the Revenue to delete the levy of fees under Section 234E in all the appeals.Result:All the appeals at the instance of the assessees were allowed, and the order was pronounced in the open court on 19.03.2020.