2025 (2) TMI 1510 - AT - Income Tax

Temporal application of tax levy: fee cannot be imposed for intimations issued before the law's effective date, appeals allowed.

Delay of 3,636 days was condoned where the assessee alleged non-receipt of an intimation and acted promptly upon actual service; tribunals and precedents ... Levy of late filing fees u/s 234E - Intimation issued to the assessee on 12th March, 2014 generated under the provisions of section 200A/206CB - HELD THAT:- Power to levy such fees were came into existence by an amendment made by Finance Act, 2015 w.e.f 01.06.2015. Therefore, the order of levy fees from the assessee was not in accordance with law. The similar view has been taken by the Co-ordinate Bench of Jaipur Benches wherein such levy has been quashed by passing detailed order which has been relied upon by the Ld. AR of the assessee while arguing the case. SEE M/S MENTOR INDIA LIMITED [2016 (12) TMI 1648 - ITAT JAIPUR] as held demand u/s. 200A for computation and intimation for the payment of fee u/s. 234E could not be made in purported exercise of power u/s. 200A for the period of the respective assessment years prior to 1st June, 2015. Decided in favour of assessee. Issues: (i) Whether the delay of 3636 days in filing the appeal should be condoned. (ii) Whether levy of fee under Section 234E of the Income-tax Act, 1961 can be sustained in respect of intimations issued under Section 200A/206CB of the Income-tax Act, 1961 prior to 01.06.2015.Issue (i): Whether the delay of 3636 days in filing the appeal should be condoned.Analysis: The assessee placed on record an affidavit stating the intimation dated 12.03.2014 was not received by the assessee and the appeal was filed upon actual service. The revenue produced system records showing generation and transmission of intimations. On the facts, the assessee acted immediately upon becoming aware of the intimation. Relevant authorities and precedents permitting leniency where the assessee was prevented by sufficient cause were applied.Conclusion: The delay of 3636 days is condoned and the appeals are admitted for adjudication on merits (in favour of the assessee).Issue (ii): Whether levy of fee under Section 234E of the Income-tax Act, 1961 can be sustained for intimations issued under Section 200A/206CB of the Income-tax Act, 1961 prior to 01.06.2015.Analysis: Section 234E was introduced by the Finance Act, 2015 with effect from 01.06.2015. Intimations under Section 200A were issued in March 2014. Coordinate decisions and authoritative reasoning acknowledging that demands for fee under Section 234E cannot be made by intimation generated under Section 200A prior to the effective date were followed. Where earlier intimations lacked legal authority to levy the Section 234E fee, further constitutional scrutiny becomes academic and the demand must be set aside.Conclusion: The levy of fee under Section 234E of the Income-tax Act, 1961 in respect of intimations issued under Section 200A/206CB prior to 01.06.2015 is quashed (in favour of the assessee).Final Conclusion: The appeals are allowed; delay is condoned and demands of fee under Section 234E raised by intimations dated prior to 01.06.2015 are quashed, resulting in allowance of the appeals of the assessee.Ratio Decidendi: Section 234E of the Income-tax Act, 1961, having been introduced by the Finance Act, 2015 with effect from 01.06.2015, cannot be validly invoked to levy fees by intimation issued under Section 200A/206CB of the Income-tax Act, 1961 prior to that effective date; delay in filing appeal may be condoned where the assessee was prevented by sufficient cause and acted promptly on becoming aware.