2023 (3) TMI 602 - AT - Income Tax

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 ... Levy of fee u/s.234E - demand notices u/s 200A - delay in filing the TDS statements in respect of the quarterly statements namely 24Q and 26Q during various quarters relating to periods prior to 01.06.2015 - HELD THAT:- Delhi in the case of Shri Raj Veer Singh vs ACIT, CPC-TDS, Vaishali, Ghaziabad [2021 (7) TMI 376 - ITAT DELHI] has held that the fee levied for periods prior to 01.06.2015 is not sustainable in the eyes of law. We are of the considered view that there is no provision under section 200A of the Act, while processing quarterly TDS statements filed prior to 01.06.2015 to levy late filing fees u/s.234E of the Act. As regards arguments of the ld. DR that correction statements have been filed after 01.06.2015 and intimations have been issued after 01.06.2015 and thus, there is provision for levy of late fee u/s 234E of the Act, we find that once, an assessee filed original quarterly TDS statements before 01.06.2015, then even if correction statements are filed after amendment on 01.06.2015, there is no question of levy of late fee because law provided for filing correction statements to rectify any mistakes in original statements. Thus, we reject arguments of the ld. DR present for the Revenue. We, therefore are of the considered view that late fee charged u/s.234E of the Act, while processing quarterly TDS returns filed prior to 01.06.2015 is not sustainable under the law. Thus, we direct the Assessing Officer to delete late fee charged u/s.234E of the Act. Decided in favour of assessee. 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 234EThe 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 PrecedentsThe 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 DecisionAfter 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.ConclusionIn 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.