2021 (4) TMI 949 - AT - Income Tax

Tribunal overturns late fee under section 234E, emphasizes statutory provisions in tax law

Susheela Hospital, Hyderabad Versus Income-tax Officer, Ward – 2 (2), Hyderabad.

The Tribunal allowed all the appeals of the assessee, setting aside the orders of the CIT(A) and directing the deletion of the late fees levied under ... Late fee u/s 234E in intimation u/s 200A - assessee contended that the provisions to include late fee u/s 234E in the intimation u/s 200A of the Act came into effect only through the Finance Act, 2015 w.e.f. 01/06/2015 and, hence, prior to 01/06/2015 such inclusion of late fee u/s 234E in the intimation u/s 200A is not permissible under the law - HELD THAT:- It is seen that prior to 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid As relying on M/S. TERRA INFRA DEVELOPMENT LIMITED [2018 (10) TMI 285 - ITAT HYDERABAD]we find that the TDS returns filed by the assessee for the relevant period i.e., FY 2012-13 relevant to AY 2013-14 were prior to 01/06/2015. Therefore, respectfully following the said decision of the coordinate bench, we set aside the orders of CIT(A) and direct the AO to delete the fees levied u/s 234E in all the appeals under consideration. - Decided in favour of assessee. Issues:1. Delay in filing appeals before ITAT.2. Validity of late fee levied by the AO under section 234E.Analysis:1. Delay in filing appeals before ITAT:The appellant filed an appeal with a delay of 104 days, attributing it to the preoccupation of their counsel in other professional activities. Citing legal precedents, the Tribunal held that the delay was unintentional and beyond the appellant's control, thus condoning the delay to ensure substantial justice. The case proceeded to be adjudicated on its merits.2. Validity of late fee levied by the AO under section 234E:The appellant contested the late fee imposed by the AO under section 234E, arguing that such inclusion in the intimation under section 200A was impermissible before June 1, 2015. The appellant relied on case laws to support their contention. The CIT(A), however, upheld the late fee levy based on a judgment of the Gujarat High Court. The Tribunal, after considering the arguments and precedents, found that prior to June 1, 2015, there was no provision in the Act enabling the levy of late fees under section 234E through section 200A. Referring to a similar case, the Tribunal held that the late fee could not be levied for TDS returns filed before June 1, 2015. Consequently, the Tribunal directed the AO to delete the late fee levied under section 234E in the appeals under consideration, ruling in favor of the appellant.In conclusion, the Tribunal allowed all the appeals of the assessee, setting aside the orders of the CIT(A) and directing the deletion of the late fees levied under section 234E. The judgment emphasized the importance of statutory provisions and the retrospective application of laws in tax matters.