Tribunal rules late filing fees not applicable before 01.06.2015

The Tribunal held that late filing fees under Section 234E of the Income Tax Act could not be charged for periods before 01.06.2015, as the amendment in Section 200A(1)(c) was prospective. The Tribunal allowed the appeal, overturning the confirmation of the levy by the lower authorities and directing the deletion of the fees imposed under Section 234E.

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Issues Involved:
1. Levy of late filing fee under Section 234E of the Income Tax Act.
2. Applicability of Section 200A(1)(c) for computation of fees under Section 234E.
3. Rule of consistency in judicial decisions.
4. Validity and constitutional challenge of Section 234E.
5. Period of applicability for the levy of fees under Section 234E.

Detailed Analysis:

1. Levy of Late Filing Fee under Section 234E:
The core issue in this appeal is the levy of fees under Section 234E of the Income Tax Act for the delay in filing TDS statements. The appellant challenged the levy, arguing that the fee under Section 234E is not leviable for periods before 01.06.2015, the date when clause (c) was inserted in Section 200A(1) for the computation of such fees during processing.

2. Applicability of Section 200A(1)(c) for Computation of Fees under Section 234E:
The Revenue argued that Section 234E is a charging provision and the insertion of clause (c) in Section 200A(1) by the Finance Act, 2015 is merely a machinery provision for processing TDS statements. The DR contended that the fee under Section 234E was always chargeable from 01.07.2012, and the amendment in Section 200A(1)(c) only facilitated the computation of such fees. The Tribunal, however, noted that the amendment to Section 200A(1) is prospective and not retroactive, meaning fees under Section 234E could not be charged for periods before 01.06.2015.

3. Rule of Consistency in Judicial Decisions:
The DR cited the principle of the rule of consistency, referring to the decision in Krishak Bharati Cooperative Ltd vs. DCIT, where the rule should not create anomalies. However, the Tribunal emphasized that in cases of conflicting High Court decisions, the decision favoring the assessee should be followed, as held by the Supreme Court in CIT vs. Vegetable Products Ltd.

4. Validity and Constitutional Challenge of Section 234E:
The DR highlighted that various High Courts, including the Gujarat, Madras, and Rajasthan High Courts, have upheld the validity of Section 234E, asserting that it is not ultra vires or violative of the constitution. The Tribunal acknowledged these decisions but focused on whether the computation of fees under Section 234E could be applied retroactively.

5. Period of Applicability for the Levy of Fees under Section 234E:
The Tribunal noted that the TDS statements in question were filed before 01.06.2015. Referring to the Karnataka High Court's decision in Fatehraj Singhvi vs. UOI, the Tribunal held that the amendment to Section 200A(1) is prospective. Therefore, for periods before 01.06.2015, no late filing fee under Section 234E could be charged during the processing of TDS statements.

Conclusion:
The Tribunal concluded that the CIT(A) was not justified in confirming the levy of late fee under Section 234E for delays in filing TDS statements before 01.06.2015. The Tribunal allowed the appeal, setting aside the orders of the lower authorities and directing the deletion of the fees levied under Section 234E. The decision was pronounced in the open court on 31.08.2020.

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