Section 234E fee cannot be levied for pre-01-06-2015 TDS defaults processed under section 200A(1)(c).

Fee under section 234E could not be levied through the processing mechanism in section 200A(1)(c) for belated TDS statements relating to periods before 01-06-2015, because that enabling provision took effect only from that date. On that basis, the fee demands for the relevant periods were held unsustainable and were set aside in favour of the assessee.

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Issues: Whether fee under section 234E could be levied for belated TDS statements pertaining to periods prior to 01-06-2015.

Analysis: Section 200A(1)(c) was inserted by the Finance Act, 2015 with effect from 01-06-2015 to enable computation of fee under section 234E while processing TDS statements. The levy of fee for defaults occurring before that date was held to be impermissible, and the issue was covered by binding precedent holding that no fee under section 234E can be imposed for periods prior to 01-06-2015.

Conclusion: The fee under section 234E for the relevant assessment years, insofar as it related to periods prior to 01-06-2015, was not sustainable and the challenge succeeded in favour of the assessee.

Final Conclusion: The impugned fee demands were set aside and all the appeals succeeded.

Ratio Decidendi: Fee under section 234E, when sought to be levied through the processing mechanism under section 200A(1)(c), cannot be imposed for defaults relating to TDS statements of periods prior to the date on which that provision came into force.

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