2022 (6) TMI 414 - AT - Income Tax

Amendment to Income Tax Act Applied Prospectively, Late Filing Fees Invalid

The Tribunal held that the amendment to Section 200A of the Income Tax Act, 1961, is prospective from 01.06.2015, rendering the levy of late fees under ... Levying late fees u/s 234E - delay in filing of TDS statement(s) - intimation u/s 200A - scope of amendment to section 200A - HELD THAT:- As levying late fees u/s 234E of the Act; involving varying sums, for delay in filing of TDS statement(s), there is hardly any dispute between the parties that this statutory provision itself carries prospective effect from 01.06.2015 whereas all these quarters / assessment years; as the case may be, in issue before us are well before the said date. That being the clinching fact, we find that the instant issue to be hardly res integra in light of tribunal”s decision in MEDICAL SUPERINTENDENT RURAL HOSPITAL DODI BK AND JUNAGADE HEALTHCARE PVT. LTD. [2018 (10) TMI 1587 - ITAT PUNE] The Revenue could not file any case law to the contrary except Rajesh Kourani Vs. Union of India [2017 (7) TMI 458 - GUJARAT HIGH COURT] which already stands considered in the foregoing discussion. We, accordingly, accept the assessee”s identical sole substantive ground in all these appeals Issues Involved:1. Levy of late fees under Section 234E of the Income Tax Act, 1961.2. Prospective effect of the amendment to Section 200A of the Income Tax Act, 1961.3. Validity of intimation issued under Section 200A for periods prior to 01.06.2015.4. Timeliness of appeals filed against orders passed under Section 154 of the Income Tax Act, 1961.Issue-wise Detailed Analysis:1. Levy of Late Fees under Section 234E of the Income Tax Act, 1961:The primary issue in these appeals is the challenge against the levy of late fees under Section 234E of the Income Tax Act, 1961, for delays in filing TDS statements. The appellant contends that the statutory provision for levying late fees under Section 234E has a prospective effect from 01.06.2015. Therefore, the levy of such fees for periods before this date is not valid.2. Prospective Effect of the Amendment to Section 200A of the Income Tax Act, 1961:The Tribunal has consistently held that the amendment to Section 200A(1) of the Act, which allows for the levy of late fees under Section 234E, is procedural and has a prospective effect from 01.06.2015. This position is supported by multiple decisions, including the consolidated order dated 25.10.2018 in ITA Nos.651/PUN/2018 to 661/PUN/2018 and ITA Nos.1018/PUN/2018 to 1028/PUN/2018, and the decision in Maharashtra Cricket Association Vs. DCIT (CPC)-TDS, Ghaziabad.3. Validity of Intimation Issued under Section 200A for Periods Prior to 01.06.2015:The Tribunal and the Hon'ble High Court of Karnataka in Fatheraj Singhvi Vs. Union of India have held that the Assessing Officer was not empowered to charge fees under Section 234E while issuing intimation under Section 200A for periods before 01.06.2015. Consequently, any such intimation issued for periods prior to this date is invalid and the demand raised by charging the fees under Section 234E is not valid. This principle has been applied in various cases, including Vidya Vardhani Education and Research Foundation and Medical Superintendent Rural Hospital Vs. ACIT (CPC)-TDS.4. Timeliness of Appeals Filed Against Orders Passed under Section 154 of the Income Tax Act, 1961:In cases where appeals were filed against orders passed under Section 154, the Tribunal clarified that the period for filing appeals should be computed from the date of the order under Section 154, not from the date of the original intimation under Section 200A. This was highlighted in the case of Medical Superintendent Rural Hospital, where the CIT(A)'s dismissal of appeals due to delay was found to be without merit.Conclusion:The Tribunal concluded that the amendment to Section 200A is prospective from 01.06.2015, and thus, the levy of late fees under Section 234E for periods before this date is not valid. The appeals filed by the assessee were allowed, and the impugned late filing fees were deleted. The Tribunal also emphasized that appeals against orders under Section 154 should be considered timely if filed within the prescribed period from the date of the order under Section 154. The decision of the Hon'ble High Court of Karnataka was preferred over the contrary view of the Hon'ble High Court of Gujarat, following the principle that the view favorable to the assessee should be adopted in the absence of a jurisdictional High Court decision.