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 Tribunal held that delay due to improper legal advice can be condoned, especially when the legal issue was already decided in favor of the assessee. Additionally, it was clarified that interest under section 234E cannot be imposed for periods before June 1, 2015, leading to the setting aside of the NFAC's order confirming the levy of fees. The judgment ensures fair treatment for taxpayers by clarifying the legal provisions on fee imposition.

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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.

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