2024 (11) TMI 690 - AT - Income Tax

Tribunal Rules Late Fee Invalid for TDS Returns Prior to June 2015, Citing Lack of Authority Before Finance Act.

Vidyamandir Madhyamic Prashala Versus Income Tax Officer, Kolhapur

The Tribunal ruled in favor of the appellant, overturning the imposition of a late fee of Rs. 18,400 under section 234E for the delay in TDS return ... Levying Fee u/s 234E for delay in submission of TDS return within the stipulated time - statement processed u/s.200A of the Act prior to 01.06.2015 - HELD THAT:- We observe that the issue of levy of fee u/s.234E is no more res integra by virtue of several decisions rendered by this Tribunal on this very issue. The assessment year involved in the present appeal is 2013-14 which show that the fee u/s.234E has been imposed for the delay in furnishing the statement for Quarter-2, in the return processed u/s.200A dated 21.01.2014, i.e., prior to 01.06.2015. As regards the fate of fees levied u/s.234E of the Act for the returns filed and processed before 01.06.2015, we find the Coordinate Benches of this Tribunal after considering the judicial pronouncements have been taking a consistent view that the amendment brought in Finance Act, 2015 w.e.f. 01.06.2015 under Section 200A (clause (c)] of the Act is prospective in nature thereby empowering the Revenue authorities to charge fee u/s.234E of the Act only after 01.06.2015. In that view of the matter, Revenue authorities are empowered to impose such late fee u/s.234E only for the default committed after 01.06.2015 and not prior to that. The Hon’ble Kerala High Court in Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and others [2022 (2) TMI 1061 - KERALAHIGH COURT] has affirmed the non-imposition of fee for the period prior to 01.06.2015. Similar view has been taken in Jiji Varghese [2022 (3) TMI 1291 - KERALA HIGH COURT] holding that no fee u/s.234E can be imposed for the periods of the respective A.Ys. prior to 1st June, 2015. Similar view was also taken by this Tribunal in the case of Dadasaheb Vitthalrao Urhe [2024 (3) TMI 149 - ITAT PUNE] Appeal of the assessee is allowed. Issues:Levy of late fee u/s.234E for delay in TDS return submission prior to 01.06.2015.Analysis:The appeal pertains to the levy of late fee u/s.234E for delay in submitting TDS return before 01.06.2015. The appellant contested the authority of the DCIT to impose such fees under section 200A, arguing that the Finance Act, 2015 introduced this provision prospectively from 01.06.2015. The Tribunal noted that the issue to be decided was whether the Revenue was justified in levying the late fee u/s.234E before 01.06.2015.The facts revealed that the TDS return for Quarter-2 of FY 2012-13 was filed on 15.01.2013, processed on 21.01.2014, and a fee of Rs. 18,400 was imposed. Despite the appellant's absence during the hearing, the Departmental Representative supported the fee imposition. The Tribunal observed that the issue of fee u/s.234E had been extensively addressed in prior Tribunal decisions. Notably, the Finance Act, 2015 made the provision applicable only from 01.06.2015 onwards.Citing various judicial precedents, including decisions by the Kerala High Court and previous Tribunal cases, the Tribunal concluded that the fee u/s.234E could not be imposed for periods before 01.06.2015. The Tribunal held that the Revenue authorities were empowered to charge the late fee only for defaults occurring after 01.06.2015. Consequently, the Tribunal overturned the order and deleted the Rs. 18,400 fee imposed u/s.234E, ruling in favor of the assessee based on the established legal principles and precedents.In light of the above analysis, the Tribunal allowed the appeal of the assessee, emphasizing that the fee imposition was not valid for the period in question. The order was pronounced on November 13, 2024, with the Tribunal ruling in favor of the appellant and deleting the late fee levied u/s.234E.