ITAT Chennai: Fees under section 234E not applicable pre-2015

The Appellate Tribunal ITAT Chennai allowed all five appeals filed by the assessee, ruling in favor of the appellant and setting aside the late filing fees charged under section 234E for TDS statements filed prior to 01.06.2015. The Tribunal held that the amendment enabling the levy of fees under section 234E was prospective and not retrospective, applying only to statements filed after 01.06.2015. The decision was based on the absence of a legal provision before the specified date and the precedents supporting the prospective nature of the amendment.

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Issues:
Late filing fee under section 234E of the Income Tax Act for TDS statements filed prior to 01.06.2015.

Analysis:

Issue 1: Late Filing Fee under Section 234E

The case involved appeals against the levy of late filing fees under section 234E of the Income Tax Act for TDS statements filed prior to 01.06.2015. The appellant, a private limited company engaged in civil construction, had deducted and paid taxes but faced delays in filing TDS statements. The Deputy Commissioner of Income Tax levied late filing fees under section 234E while processing the TDS statements. The Commissioner of Income Tax (Appeals) dismissed the appeals challenging the levy of fees.

The Appellate Tribunal noted that the enabling provision to levy fees under section 234E was introduced by the Finance Act, 2015, effective from 01.06.2015. The Tribunal emphasized that prior to this amendment, there was no provision to levy such fees. Referring to various court decisions, the Tribunal held that the amendment was prospective and not retrospective. It was established that the power to levy fees under section 234E while processing TDS statements was applicable only for statements filed after 01.06.2015.

Issue 2: Legal Interpretation and Precedents

The Tribunal referred to legal interpretations and precedents to support its decision. It cited cases such as Smt G. Indhirani vs DCIT and Sam & Co vs ACIT, where it was held that the fee levied under section 234E while processing TDS statements was beyond the scope of adjustment provided under Section 200A of the Act. Additionally, the Tribunal mentioned the Karnataka High Court's decision in Fatheraj Singhvi v. Union of India, emphasizing that the fee under section 234E was prospective from 01.06.2015.

Issue 3: Tribunal's Decision

After considering the arguments presented by the Revenue, the Tribunal concluded that there was no provision under section 200A of the Act to levy late filing fees under section 234E for TDS statements filed before 01.06.2015. The Tribunal rejected the Revenue's argument that correction statements filed after the amendment allowed for late fees, stating that the law provided for correction statements to rectify mistakes in original statements without additional fees. Consequently, the Tribunal directed the Assessing Officer to delete the late fees charged under section 234E of the Act.

Conclusion

In conclusion, the Appellate Tribunal allowed all five appeals filed by the assessee, ruling in favor of the appellant and setting aside the late filing fees charged under section 234E for TDS statements filed prior to 01.06.2015. The decision was based on the absence of a legal provision before the specified date and the prospective nature of the relevant amendment introduced by the Finance Act, 2015.

This detailed analysis covers the issues related to the late filing fee under section 234E of the Income Tax Act as discussed in the judgment delivered by the Appellate Tribunal ITAT Chennai.

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