Tax Appeals: Late filing fees contested under Income Tax Act; Tribunal rules in favor of assessee

The delay in filing appeals was condoned due to oversight, with no objection from Revenue. The issue of charging late filing fees under section 234E of the Income Tax Act, 1961, was contested. The Tribunal ruled in favor of the assessee, citing the amendment's prospective nature and judgments from Karnataka and Gujarat High Courts. Late fees and interest for TDS statements before 01/06/2015 were deemed unsustainable. Both appeals were allowed, directing the Assessing Officer to delete the late fees and interest. The order was pronounced by the ITAT Hyderabad on 28th February 2023.

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Issues:
- Condoning the delay in filing appeals
- Charging of late filing fee u/s 234E of the Income Tax Act, 1961

Delay in Filing Appeals:
The appeals were filed with a delay of 64 days each due to the oversight of the chartered accountant in identifying suitable counsel. The delay was not objected to by the Revenue, and there was no evidence of malafide intent on the part of the assessee. Considering the circumstances, the delay was condoned, and the appeals were heard.

Charging of Late Filing Fee u/s 234E:
The main issue in the appeals was the charging of late filing fee under section 234E of the Income Tax Act, 1961, while issuing the intimation under section 200A of the Act. The assessee, a private limited company engaged in manufacturing, received notices for late filing fee for the assessment year 2012-13. The CIT(A) upheld the levy of fee and interest, stating it was mandatory for late TDS statements.

The AR argued that the insertion of clause (c) to section 200A(1) of the Act from 01/06/2015 meant that no late filing fee could be charged for TDS statements filed before this date. The notices under section 200A for late filing fees related to periods before 01/06/2015 could not be validly issued after this date, even for belatedly filed returns.

The DR contended that the late filing fee and penalty were justified due to the late submission of returns by the assessee. However, the Tribunal referred to the Karnataka High Court judgment in Fatheraj Singhvi & Ors vs. Union of India, which clarified the retrospective or prospective nature of the amendment. The High Court held that the amendment was prospective, and demands under section 200A for late filing fees under section 234E for periods before 01/06/2015 were not maintainable.

The Tribunal also cited the Gujarat High Court case of Rajesh Kourani vs. UOI and a previous Tribunal decision, which supported the view that late fees and interest for TDS statements before 01/06/2015 could not be upheld. Consequently, the Assessing Officer was directed to delete the late fees and interest.

In conclusion, both appeals were allowed, and the charging of late filing fees and interest for TDS statements prior to 01/06/2015 was deemed unsustainable based on the Karnataka High Court judgment and subsequent decisions.

Order pronounced on 28th February 2023 by the Appellate Tribunal ITAT Hyderabad.

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