2022 (9) TMI 718 - AT - Income Tax

Tribunal Cancels Late Fees for 2012-13, Emphasizes Justice

The Tribunal allowed the appeals, directing the deletion of late fees levied under Section 234E for the financial year 2012-13, as such fees could only be ... Levy of late fees u/s 234E - belated submission of Tax Deducted at Source statements for F.Y. 2012-13 - levying such late fee prior to 01-06-2015 - HELD THAT:- It is with effect from 01-06-2015 that an amendment was made to section 200A of the Act providing that fees u/s 234E could be computed at the time of processing of return of income and an intimation could be issued specifying the same payable by the deductor as fees u/s 234E of the Act. Hon'ble Karnataka High Court in the case Fatheraj Singhvi Vs. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] has held that the provisions of section 234E of the Act are substantive in nature and the mechanism for computing the late fee was provided by the Parliament only w.e.f. 01-06-2015. Therefore, late fees u/s 234E of the Act can be levied only prospectively w.e.f. 01-06-2015 and not prior to that . Admittedly in all the above three cases, the Revenue has levied such late fee u/s 234E for F.Y. 2012-13 prior to 01-06-2015 and hence, we set aside the concerned orders of the National Faceless Appeal Centre and direct the A.O to delete the late fee levied u/s 234E of the Act from the hands of the assessee. Issues Involved:1. Levy of late fees under Section 234E of the Income-tax Act, 1961.2. Condonation of delay in filing the appeal.Issue-wise Detailed Analysis:1. Levy of Late Fees under Section 234E:The central grievance in these appeals is the levy of late fees under Section 234E of the Income-tax Act, 1961. The assessee contended that the Department could not levy late fees prior to 01-06-2015, as per judicial pronouncements, and since the relevant financial year in question is 2012-13, such a levy is not permissible. The Department's representative conceded to this argument.The Tribunal observed that the issue for adjudication is the levy of late fees under Section 234E. It is a settled legal position that the Department did not have the power to levy such late fees before 01-06-2015. The Tribunal referred to the Pune Bench decision in ITA No. 1201/PUN/2019 and others, where it was held that the late fees under Section 234E can only be levied prospectively from 01-06-2015. This position was supported by the Karnataka High Court in Fatheraj Singhvi vs. Union of India, 73 taxmann.com 252, which stated that the mechanism for computing late fees was provided by Parliament only from 01-06-2015.The Tribunal concluded that since the late fees were levied for the period prior to 01-06-2015, they are not mandated by law. Therefore, the orders of the National Faceless Appeal Centre were set aside, and the Assessing Officer was directed to delete the late fees levied under Section 234E.2. Condonation of Delay in Filing the Appeal:The Tribunal also addressed the issue of condonation of delay in filing the appeal. It referred to the Supreme Court's decision in Collector Land Acquisition vs. Mst. Katiji, 167 ITR 471 (SC), which emphasized that a litigant does not benefit from lodging an appeal late and that refusing to condone delay can result in a meritorious matter being dismissed at the threshold. The Supreme Court advocated for a rational and pragmatic approach to condonation of delay.Similarly, the Hon'ble Jurisdictional High Court in Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.), held that an overall view in the larger interest of justice should be taken, and no one should be deprived of an adjudication on merits unless there is clear evidence of deliberate delay or lack of bona fides.Applying these principles, the Tribunal found that the appellant had a strong case on the merits and that the CIT(A) should have condoned the delay and adjudicated the appeal on merits. However, since the issue involved is purely legal, the Tribunal decided the issue on merits, directing the deletion of the late fees levied under Section 234E.Conclusion:The Tribunal allowed the appeals, directing the deletion of the late fees levied under Section 234E for the financial year 2012-13, as such fees could only be levied prospectively from 01-06-2015. The Tribunal also emphasized the importance of condoning delays in the interest of substantial justice. The appeals were allowed, and the orders of the National Faceless Appeal Centre were set aside.