2023 (5) TMI 222 - AT - Income Tax

Tribunal allows appeals on late fees under Income-tax Act, 1961, clarifies legal provisions

The Tribunal allowed all appeals regarding the condonation of delay in filing appeals due to late fees under section 234E of the Income-tax Act, 1961. The ... Delay in filing the first appeals ranging from minimum of 1973 days to maximum of 2881 days - whether such a long delay deserves condonation? - HELD THAT:- As it is relevant to note the judgment of the Hon’ble High Court of Bombay in Vijay Vishin Meghani Vs. DCIT & Anr [2017 (10) TMI 248 - BOMBAY HIGH COURT] held that none should be deprived of an adjudication on merits unless it is found that the litigant deliberately delayed the filing of appeal. Similar to the cases under consideration, in that case too, delay of 2881 days crept in due to improper legal advice. Hon’ble Supreme Court in Anil Kumar Nehru [2019 (1) TMI 1075 - SC ORDER] held that : `It is a matter of record that on the identical issue raised by the appellant in respect of earlier assessment, the appeal is pending before the High Court. In these circumstances, the High Court should not have taken such a technical view of dismissing the appeal in the instant case on the ground of delay, when it has to decide the question of law between the parties in any case in respect of earlier assessment year. We are confronted with a situation in which the question of law involved in the present set of appeals has already been decided in favour of the assessee. Under these circumstances, we condone the delay crept before the ld. CIT(A). Levy of fee u/s.234E - intimation u/s 200A - TDS returns for the respective quarters were filed belatedly - imposition of fee for the period prior to 01-06-2015 - HELD THAT:- Section 200A deals with processing of statements of tax deducted at source. Clause (c) of section 200A(1) was inserted by the Finance Act, 2015 w.e.f. 01-06-2015 providing for the levy of fee u/s.234E of the Act. In that view of the matter, such fee u/s.234E can be levied only for the default committed after 01-06-2015 and not prior to that. In Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and others [2022 (2) TMI 1061 - KERALAHIGH COURT] has affirmed the non-imposition of fee for the period prior to 01-06-2015. Similar view has been taken in Jiji Varghese [2022 (3) TMI 1291 - KERALA HIGH COURT] holding that no interest u/s 234E can be imposed for the periods of the respective A.Ys. prior to June 1, 2015 - Decided in favour of assessee. Issues involved:The judgment deals with the condonation of delay in filing appeals due to late fees imposed under section 234E of the Income-tax Act, 1961 for belated filing of TDS returns.Condonation of Delay:The appeals arose from orders passed by the CIT(A) in National Faceless Appeal Centre (NFAC), Delhi, dismissing them on account of delays ranging from 1973 days to 2881 days. The issue was whether such a long delay deserves condonation. Citing the judgment of the Hon'ble High Court of Bombay, it was noted that delay due to improper legal advice can be condoned. The Tribunal found that the legal issue raised by the assessee was already decided in their favor by the jurisdictional High Court and other authorities, thus condoning the delay.Charging of Interest u/s.234E:The appeals raised the issue of charging interest under section 234E for quarters of the assessment years. The assessee, engaged in the business of manufacture and sale of Thermowares, filed TDS returns belatedly, leading to the imposition of late fees by the Assessing Officer. The appeals against the waiver of such fees were dismissed by the CIT(A) due to being time-barred.Legal Analysis:The Tribunal examined that the fee under section 234E was imposed for delays in furnishing statements for quarters before 01-06-2015. Section 200A(1)(c) inserted by the Finance Act, 2015 allowed the levy of fee under section 234E only for defaults after 01-06-2015. Referring to judgments like Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and Jiji Varghese VS. ITO (TDS) & Ors., it was held that no interest under section 234E can be imposed for periods before June 1, 2015. Consequently, the NFAC's order confirming the levy of fee under section 234E was set aside, and the appeals were allowed.Conclusion:In conclusion, the Tribunal allowed all the appeals, emphasizing the correct application of legal provisions regarding the condonation of delay and the charging of interest under section 234E. The judgment provides clarity on the timelines and conditions for imposing fees under the Income-tax Act, ensuring fair treatment for taxpayers.