2022 (1) TMI 43 - AT - Income Tax

Tribunal allows appeals, condones delay, remits fee levy issue to CIT(A) for decision on merits.

The Tribunal allowed the appeals filed by the assessee for statistical purposes, condoned the delay in filing the appeals before the CIT(A), and remitted ... Levy of fee u/s 234E - late filing of TDS statements - orders passed u/s 200A - HELD THAT:- The levy of late fee u/s 234E of the Act through an intimation u/s 200A of the Act for the period prior to 01.06.2015 has been decided in favour of the assessee by the judgment of the Hon’ble Karnataka High Court in the case of Sri Fatheraj Singhvi v. Union of India & Ors.[2016 (9) TMI 964 - KARNATAKA HIGH COURT] AO cannot make any adjustment other than one prescribed in section 200A of the Act. Prior to 01.06.2015, there was no enabling provision in section 200A of the Act for making adjustment in respect of statement filed by the assessee with regard to tax deducted at source by levying fees u/s 234E - Parliament for the first time enabled the AO to make adjustment by levying fees u/s 234E of the Act with effect from 01.06.2015. The Hon’ble jurisdictional High Court in the case of Sri Fateharaj Singhvi v. Union of India & Ors. (supra), has held that adjustment cannot be made by the A.O. for the respective assessment year prior to 01.06.2015. Therefore, for the relevant assessment years, namely, A.Ys 2013-2014, 2014- 2015 and 2015-2016, the levy of tax u/s 234E of the Act is impermissible going by the dictum laid down by the Hon’ble jurisdictional High Court in the case of Sri Fateharaj Singhvi v. Union of India & Ors. (supra).We deem it appropriate to remit the issue of levy of fee u/s 234E of the Act through intimation u/s 200A of the Act to the file of the CIT(A) (since the CIT(A) has not decided the issue on merits). Appeals filed by the assessee are allowed for statistical purposes. Issues Involved:1. Condonation of delay in filing the appeal.2. Levy of late fee under section 234E for the period prior to 01.06.2015.3. Authority of the Assessing Officer to levy fees under section 234E through intimation under section 200A.Detailed Analysis:Condonation of Delay in Filing the Appeal:The assessee contended that the orders passed under section 200A were not physically or otherwise served on them. They became aware of the levy of penalty only when recovery notices were served. The Tribunal noted that the expression 'sufficient cause' should be interpreted liberally to advance substantial justice. The Tribunal referred to several judgments of the Hon’ble Apex Court, emphasizing that rules of limitation are not meant to destroy the rights of the parties but to ensure that parties do not resort to dilatory tactics. The Tribunal concluded that the submissions of the assessee could not be brushed aside as false and condoned the delay in filing the appeals before the CIT(A).Levy of Late Fee Under Section 234E for the Period Prior to 01.06.2015:The Tribunal referred to the judgment of the Hon’ble Karnataka High Court in the case of Sri Fatheraj Singhvi v. Union of India & Ors., which held that the levy of late fee under section 234E through an intimation under section 200A for the period prior to 01.06.2015 is impermissible. The High Court observed that the provisions of section 234E, which provided for a fee for late filing of TDS statements, did not confer the authority to levy such fees through section 200A prior to 01.06.2015. The Tribunal concluded that for the relevant assessment years (2013-2014, 2014-2015, and 2015-2016), the levy of fees under section 234E was not permissible.Authority of the Assessing Officer to Levy Fees Under Section 234E Through Intimation Under Section 200A:The Tribunal emphasized that prior to 01.06.2015, there was no enabling provision in section 200A for making adjustments in respect of statements filed by the assessee with regard to TDS by levying fees under section 234E. The Parliament enabled the Assessing Officer to make such adjustments with effect from 01.06.2015. Therefore, any demand for fees under section 234E for periods prior to this date could not be made under section 200A. The Tribunal remitted the issue of the levy of fees under section 234E through intimation under section 200A to the CIT(A) for a decision on merits, as the CIT(A) had not decided the issue on merits.Conclusion:The Tribunal allowed the appeals filed by the assessee for statistical purposes, condoned the delay in filing the appeals before the CIT(A), and remitted the issue of the levy of fees under section 234E through intimation under section 200A to the CIT(A) for a decision on merits. The CIT(A) was directed to afford a reasonable opportunity of being heard to the assessee before making a decision.