Appeals allowed on section 234E fees pre-amendment; delay excused by Supreme Court due to COVID-19.

The Tribunal allowed the appeals, ruling that fees under section 234E could not be imposed for periods before the amendment of section 200A on June 1, 2015. The delay in filing the appeals was excused due to the exclusion of the limitation period by the Supreme Court because of the COVID-19 pandemic.

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Issues Involved:
1. Condonation of delay in filing appeals.
2. Legality of levying fees under section 234E of the Income Tax Act prior to the amendment of section 200A.

Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The assessee filed appeals challenging the order of the CIT(A) NFAC dated 13/08/2021 for the assessment years 2013-14 and 2014-15. There was a delay of 84 days in filing these appeals before the Tribunal. The Tribunal considered the matter and admitted the petition for condonation of delay, referencing the Hon'ble Supreme Court's suo moto writ petition No.03/2020 along with M.P 21/2022, which excluded the period from 15/3/2020 to 28/02/2022 for the purpose of the period of limitation. Thus, the delay was deemed to be covered by this exclusion, and the appeals were filed in time for further adjudication.

2. Legality of Levying Fees under Section 234E:
The core issue was whether fees under section 234E could be levied for delays in filing TDS returns prior to the amendment of section 200A, which came into effect on 1st June 2015. The assessee contended that prior to this date, there was no enabling provision for the payment and levy of fees under section 234E. The CIT(A) had upheld the AO's order, relying on the Gujarat High Court's judgment in Rajesh Kourani Vs. Union of India, which held that section 234E is a charging provision.

The Tribunal, however, referred to the Karnataka High Court's judgment in Shri Fatheraj Singhvi Vs. Union of India, which dealt with a similar issue. The High Court held that section 234E, being a charging section, cannot be enforced without the machinery provision of section 200A. The judgment emphasized that the amendment to section 200A, which allows for the computation and intimation of fees under section 234E, is prospective and not retrospective. Therefore, any demand for fees under section 234E for periods prior to 1st June 2015 was without authority and invalid.

The Tribunal, following the binding decision of the jurisdictional High Court, concluded that the fees under section 234E could not be levied without the machinery provision of section 200A being in place. Consequently, the appeals were allowed in favor of the assessee.

Conclusion:
The Tribunal allowed the appeals, holding that the fees under section 234E could not be levied for periods prior to the amendment of section 200A, which came into effect on 1st June 2015. The delay in filing the appeals was condoned based on the Supreme Court's exclusion of the limitation period due to the COVID-19 pandemic.

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