2023 (1) TMI 477 - AT - Income Tax

Tribunal Allows Appeal on Section 234E Fees Pre-2015 Period

Krischain Girls High School Govind Ganj Versus Income Tax Officer – TDS Bareiley

Krischain Girls High School Govind Ganj Versus Income Tax Officer – TDS Bareiley - TMI Issues Involved:1. Levy of fees under Section 234E of the Income Tax Act, 1961 for the period prior to 01.06.2015.2. Condonation of delay in filing the appeal.Detailed Analysis:1. Levy of Fees under Section 234E for the Period Prior to 01.06.2015:Background:The assessee filed its TDS statement in Form 24Q for Q1 of FY 2015-16, which was processed, and a late fee of Rs. 61,200/- under Section 234E was levied. The assessee appealed against this levy, arguing that the fee is not sustainable as it pertains to a period before the enabling provisions were introduced under Section 200A of the Act on 01.06.2015.Arguments by the Assessee:The assessee's counsel contended that the fee levied under Section 234E is not applicable for periods before 01.06.2015, relying on the Karnataka High Court decision in the case of Fatheraj Singhvi Vs. Union of India, which held that the amendment in Section 200A by inserting clause (c) is effective only from 01.06.2015.Tribunal's Findings:The Tribunal noted that the issue is no longer res integra and has been settled in favor of the assessee by the Karnataka High Court in Fatheraj Singhvi's case. The Tribunal also referenced its own earlier decisions and the decision of the Mumbai Bench, which followed the Karnataka High Court's ruling. The Tribunal emphasized that when there is no jurisdictional High Court decision on an issue, the view favorable to the assessee should be adopted, as per the Supreme Court's decision in CIT Vs. Vegetable Products Ltd.Conclusion:The Tribunal concluded that the demand raised by the Income Tax Authorities for levying late fees under Section 234E for the period prior to 01.06.2015 cannot be sustained. The Tribunal set aside the order of the CIT(A) and allowed the assessee's appeal.2. Condonation of Delay in Filing the Appeal:Background:There was a delay of 127 days in filing the appeal. The assessee, a government-aided school, explained that the delay was due to the TDS deposits being processed through the Treasury by the Education Department.Tribunal's Findings:After reviewing the petition for condonation of delay and the accompanying affidavit, the Tribunal found the explanation satisfactory and decided to condone the delay.Conclusion:The Tribunal condoned the delay and proceeded to adjudicate the matter on merits.Summary:The Tribunal allowed the appeal of the assessee, holding that the levy of fees under Section 234E of the Income Tax Act, 1961, for the period prior to 01.06.2015 is not sustainable. The Tribunal relied on the Karnataka High Court's decision in Fatheraj Singhvi's case and its own precedents to conclude that the enabling provisions under Section 200A for levying such fees were effective only from 01.06.2015. Additionally, the Tribunal condoned the delay of 127 days in filing the appeal, finding the explanation provided by the assessee satisfactory. The order of the CIT(A) was set aside, and the appeal was allowed in favor of the assessee.