Late fee on TDS statements under section 234E depended on amended processing powers under section 200A.

Section 200A, as it stood before 01.06.2015, did not permit computation of late fee under section 234E while processing quarterly TDS statements, so the levy for pre-amendment quarters was treated as without authority and deleted. After the Finance Act, 2015 amendment, section 200A expressly enabled that processing power from 01.06.2015, and the levy for the post-amendment quarter was upheld. The Tribunal thus allowed relief for the earlier periods but sustained the charge for the later period, applying the statute according to the time at which the TDS statements were processed.

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Issues: (i) Whether late fee under section 234E of the Income-tax Act, 1961 could be levied while processing quarterly TDS statements under section 200A of the Income-tax Act, 1961 for periods prior to 01.06.2015; (ii) whether the levy was sustainable for the period after the amendment to section 200A with effect from 01.06.2015.

Issue (i): Whether late fee under section 234E of the Income-tax Act, 1961 could be levied while processing quarterly TDS statements under section 200A of the Income-tax Act, 1961 for periods prior to 01.06.2015.

Analysis: The provision for processing TDS statements under section 200A did not, prior to 01.06.2015, enable computation of the late fee prescribed under section 234E. The levy was therefore examined in the light of the amendment brought into section 200A by the Finance Act, 2015, which conferred the requisite processing power only from 01.06.2015.

Conclusion: The levy of late fee under section 234E for the quarters falling before 01.06.2015 was held to be without authority and was deleted, in favour of the assessee.

Issue (ii): Whether the levy was sustainable for the period after the amendment to section 200A with effect from 01.06.2015.

Analysis: For the quarter falling in the financial year 2015-16, the amended section 200A was applicable, and the processing of the TDS statement with levy of late fee under section 234E was treated as authorised by the statutory framework then in force.

Conclusion: The levy for the post-amendment period was upheld, against the assessee.

Final Conclusion: The Tribunal granted relief for the pre-01.06.2015 quarters and sustained the levy for the post-amendment quarter, resulting in a partial success for the assessee.

Ratio Decidendi: Late fee under section 234E can be computed while processing TDS statements under section 200A only to the extent the statute, as amended, confers that power.

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