Tribunal Overturns Late Fee Charges Under Income Tax Act, 1961 The Tribunal allowed all appeals filed by the assessee(s) regarding the charging of late fees under section 234E of the Income Tax Act, 1961 for the ...
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Tribunal Overturns Late Fee Charges Under Income Tax Act, 1961
The Tribunal allowed all appeals filed by the assessee(s) regarding the charging of late fees under section 234E of the Income Tax Act, 1961 for the fourth quarter in assessment years 2013-14 and 2014-15. The Tribunal ruled in favor of the assessee(s) by overturning the impugned orders, stating that the fee under section 234E could only be imposed for defaults post the specified date of June 1, 2015, as per precedents cited. The delay in presenting the appeals was condoned, and the cases were heard together and adjudicated on merits.
Issues: The judgment involves appeals regarding the charging of late fees under section 234E of the Income Tax Act, 1961 for the fourth quarter in assessment years 2013-14 and 2014-15.
Late Filing Condonation: The Tribunal observed a significant delay in presenting the appeals, which was explained by the counsel for the assessee as beyond their control. The delay was condoned after considering the circumstances, and the cases were heard together and adjudicated on merits.
Background and Dispute: The assessees filed TDS returns belatedly, leading to the Assessing Officer levying late fees under section 234E of the Act. After unsuccessful attempts at the National Faceless Appeal Centre, the assessees approached the Tribunal for redressal.
Legal Analysis: The main issue in all appeals was the confirmation of fees under section 234E by the AO for delays in furnishing statements before June 1, 2015. The Tribunal noted that the provision for levying fees under section 234E was inserted by the Finance Act, 2015, effective from June 1, 2015. Citing precedents like Olari Little Flower Kuries (P.) Ltd. v. UOI & Ors. and JIJI Varghese v. ITO (TDS), the Tribunal held that the fee under section 234E could only be imposed for defaults post the specified date. Consequently, the Tribunal ruled in favor of the assessee(s) and overturned the impugned orders on this sole issue.
Decision: As a result of the legal analysis, all the appeals filed by the assessee(s) were allowed. The order was pronounced in open court on 23rd August 2023.
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