2022 (9) TMI 1019 - AT - Income Tax

Appeals Allowed: Late Fees Pre-2015 Unlawful

M/s. Mindlogicx Infratec Limited Versus ACIT, CPC, TDS, Ghaziabad.

M/s. Mindlogicx Infratec Limited Versus ACIT, CPC, TDS, Ghaziabad. - TMI Issues Involved:1. Levy of late fee under Section 234E of the Income-Tax Act, 1961.2. Validity of the application under Section 154 of the Act.3. Delay in filing appeals before the CIT(A).4. Applicability of the Karnataka High Court decision in Fatehraj Singhvi v. UOI.Detailed Analysis:Issue 1: Levy of Late Fee under Section 234E of the Income-Tax Act, 1961The assessee filed TDS statements for various quarters for FY 2012-13 to 2014-15. There was a delay in filing these statements, leading the Centralized Processing Centre (CPC) to levy a late fee under Section 234E of the Income-Tax Act, 1961. Section 234E imposes a fee of Rs. 200 per day for delays in filing TDS statements. The assessee contended that the fee could not be levied for periods prior to the amendment of Section 200A by the Finance Act, 2015, effective from 1.6.2015, which allowed the computation of such fees during the processing of TDS returns.Issue 2: Validity of the Application under Section 154 of the ActThe assessee filed an application under Section 154 of the Act before the Assessing Officer (AO), arguing that the late fee under Section 234E could not be levied for periods prior to 1.6.2015. The assessee relied on the Karnataka High Court's decision in Fatehraj Singhvi v. UOI, which held that the amendment to Section 200A allowing the levy of fees under Section 234E was prospective and not applicable to periods before 1.6.2015. The CPC rejected the application, maintaining the levy of the fee.Issue 3: Delay in Filing Appeals before the CIT(A)The CIT(A) dismissed the appeals on the grounds of delay. The CIT(A) noted discrepancies in the Form No. 35 filed by the assessee, particularly in the section and sub-section of the Income-Tax Act under which the order appealed against was passed. The CIT(A) interpreted the appeal as being against the original intimation under Section 200A, dated 06.07.2014, rather than the order under Section 154, dated 26.09.2019. Consequently, the CIT(A) found the appeal to be delayed by more than five years without a sufficient cause for condonation.Issue 4: Applicability of the Karnataka High Court Decision in Fatehraj Singhvi v. UOIThe Tribunal observed that the Karnataka High Court's decision in Fatehraj Singhvi v. UOI clearly laid down that the provisions of Section 200A for levying fees under Section 234E were not applicable for periods prior to 1.6.2015. The Tribunal noted that this decision was binding on authorities within the jurisdiction. The Tribunal found that the issue raised by the assessee in the application under Section 154 was not debatable and was an apparent mistake on record, as the law was clear and settled by the jurisdictional High Court.Tribunal's Decision:The Tribunal held that the CIT(A)'s interpretation of the appeal being against the original intimation under Section 200A was incorrect. The Tribunal found that the appeal was indeed against the order under Section 154. It further held that there was no delay in filing the appeal before the CIT(A) and that the CIT(A)'s view was a technical misreading of Form No. 35.The Tribunal concluded that the levy of fees under Section 234E for periods prior to 1.6.2015 was illegal, following the Karnataka High Court's ruling in Fatehraj Singhvi v. UOI. Consequently, the Tribunal allowed the appeals and directed the deletion of the fees levied under Section 234E.Conclusion:The Tribunal allowed all the appeals filed by the assessee, holding that the levy of fees under Section 234E for periods prior to 1.6.2015 was unsustainable. The Tribunal directed the deletion of such fees and found no delay in the filing of appeals before the CIT(A). The decision was pronounced on 19-07-2022.