Late fee under section 234E cannot be levied for periods before June 1, 2015

ITAT Pune held that late fee under section 234E cannot be levied for periods prior to 01.06.2015. The tribunal found that amendment to section 200A providing mechanism for computing late fee was effective only from 01.06.2015. Following Karnataka HC precedent, the tribunal ruled that section 234E provisions are substantive in nature and can only be applied prospectively. Notices under section 200A for fee computation relating to tax deducted before 01.06.2015 were set aside, deciding in favor of the assessee.

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Issues:
Appeals filed against orders for assessment year 2014-15, levy of late fee under section 234E, legality and authority of intimation under Section 200A, constitutional validity of Section 234E.

Analysis:
1. The appeals were filed against orders for the assessment year 2014-15 regarding the levy of late fees under section 234E. The Tribunal noted that identical facts and issues were involved in the appeals, leading to a common order for disposal.
2. The main issue in the present appeal was the levy of late fees under section 234E of the Income Tax Act. The ACIT had imposed penalties for belated submission of tax deducted at source statements for the financial year 2013-14. However, a significant amendment was made under section 200A of the Act effective from 01.06.2015, allowing the computation of fees under section 234E at the time of processing the return of income.
3. The Tribunal referred to the decision of the Hon'ble Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India, which held that the provisions of section 234E were substantive and could only be levied prospectively from 01.06.2015. The Court emphasized the need to consider whether a provision confers substantive power or is merely regulatory to determine its retroactive nature.
4. Following the precedent set by the Co-ordinate Bench of Pune Tribunal in similar cases, the Tribunal directed the ACIT to delete the late fee levied under section 234E, as it was not valid for the period prior to 01.06.2015. Consequently, the appeals filed by the assessee for the assessment year 2014-15 were allowed.
5. The Tribunal's decision in ITA No.312/PUN/2024 was deemed applicable mutatis mutandis to the remaining three appeals of the assessee in ITA Nos.313 to 315/PUN/2024 for the same assessment year, resulting in the allowance of all four appeals.
6. In conclusion, all four appeals of the assessee were allowed, with the Tribunal setting aside the late fees levied under section 234E for the relevant period prior to 01.06.2015. The judgment was pronounced on the 10th day of July 2024.

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