Tribunal overturns interest charges for architectural services company; Precedents cited, orders in favor of assessee.

The Tribunal allowed all 11 appeals regarding the charging of interest under section 234E for quarters relevant to assessment years 2013-14, 2014-15, and 2015-16. The Tribunal overturned the orders by the National Faceless Appeal Centre (NFAC), Delhi, in favor of the assessee, a company providing architectural services, citing precedents that no interest under section 234E could be imposed for periods before June 1, 2015. The orders were pronounced on 8th March 2023.

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Issues:
Charging of interest u/s.234E for quarters relevant to assessment years 2013-14, 2014-15, and 2015-16.

Analysis:
The appeals arose from orders by the National Faceless Appeal Centre (NFAC), Delhi, regarding the imposition of interest u/s.234E. The assessee, a company providing architectural services, filed TDS returns belatedly, leading to the Assessing Officer (AO) levying late fees. The issue raised in all appeals was the confirmation of the fee u/s.234E. Section 200A of the Income-tax Act, 1961, deals with processing TDS statements, with clause (c) inserted by the Finance Act 2015, allowing the levy of fee u/s.234E from 01-06-2015. Precedents like Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and Jiji Varghese Vs. ITO(TDS) & Ors. held that no interest u/s 234E could be imposed for periods before June 1, 2015. Consequently, the Tribunal overturned the orders in favor of the assessee.

Outcome:
All 11 appeals were allowed, with the Tribunal pronouncing the order on 8th March 2023.

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