Tribunal overturns late filing fees pre-2015, directs deletion of related charges.

The Tribunal allowed the appeals, holding that the levy of late filing fees under Section 234E for periods before 01.06.2015 was not justified. The fees and related interest charged under Section 220(2) were directed to be deleted.

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Issues Involved:
1. Levy of late filing fee under Section 234E of the Income Tax Act.
2. Applicability of amendments to Section 200A(1) effective from 01.06.2015.
3. Rule of consistency in judicial decisions.
4. Constitutional validity of Section 234E.
5. Interpretation of Section 271H in conjunction with Section 234E.
6. Retrospective vs. prospective application of amendments.

Detailed Analysis:

1. Levy of Late Filing Fee Under Section 234E:
The primary issue revolves around the levy of late filing fee under Section 234E by the Assessing Officer (AO) and its subsequent confirmation by the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee argued that the fee under Section 234E should not be levied for defaults occurring before 01.06.2015. The Tribunal had previously discussed this in the case of Udit Jain vs. ACIT, concluding that the fee under Section 234E cannot be levied for defaults occurring before 01.06.2015.

2. Applicability of Amendments to Section 200A(1) Effective from 01.06.2015:
The Tribunal examined whether the amendments to Section 200A(1) effective from 01.06.2015, which included clause (c) for the computation of fees, could be applied retrospectively. The Tribunal found that the amendment is prospective, and thus, fees under Section 234E cannot be charged for periods before 01.06.2015. This conclusion was supported by the decision of the Karnataka High Court in Fatehraj Singhvi vs. UOI.

3. Rule of Consistency in Judicial Decisions:
The Tribunal addressed the rule of consistency, noting that while it is not absolute, it is generally followed unless there is a significant reason to deviate. The Tribunal referenced the decision of the Supreme Court in the case of Vegetable Products Ltd., which states that in the presence of conflicting decisions, the decision favoring the assessee should be followed.

4. Constitutional Validity of Section 234E:
The Tribunal acknowledged that several High Courts, including the Gujarat High Court in Rajesh Kourani vs. UOI, have upheld the constitutional validity of Section 234E. However, the Tribunal clarified that the issue at hand was not the constitutional validity but the applicability of the fee for periods before the amendment to Section 200A(1).

5. Interpretation of Section 271H in Conjunction with Section 234E:
The Tribunal discussed Section 271H, which provides for penalties related to TDS statements, and noted that it does not automatically impose penalties for delays if certain conditions are met. The Tribunal emphasized that Section 234E is a mandatory fee provision, while Section 271H involves discretionary penalties. The Tribunal concluded that the AO's levy of fees under Section 234E for periods before the amendment was not justified.

6. Retrospective vs. Prospective Application of Amendments:
The Tribunal held that the amendment to Section 200A(1) introducing clause (c) is prospective and cannot be applied retrospectively. This was supported by the decision of the Karnataka High Court, which stated that the amendment confers substantive power and thus should not be applied retroactively.

Conclusion:
The Tribunal allowed the appeals filed by the assessee, holding that the levy of late filing fees under Section 234E for periods before 01.06.2015 was not justified. The Tribunal directed the deletion of the fees and any related interest charged under Section 220(2). The decision was pronounced in the open court on 31.08.2020.

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