2025 (3) TMI 1463 - AT - Income Tax

ITAT Agra directs deletion of late filing fees under Section 234E for AY 2013-14, citing prospective amendment.

Shri Sunil Manchanda Versus ITO-TDS

The ITAT Agra ruled in favor of the assessee, directing the deletion of late filing fees levied under Section 234E of the Income Tax Act for TDS returns ... Levy of late filing fess u/s 234E qua TDS returns for various quarters - CIT(A) confirmed the same in the absence of any explanation from the assessee - HELD THAT:- We find that this issue stand covered in assessee’s favor by the decision of Fatehraj Singhvi vs UOI [2016 (9) TMI 964 - KARNATAKA HIGH COURT] holding that the amendment in section 200A came into effect only on 01-06-2015 and the same would have prospective effect. Therefore, there could not be any levy of fee for late filing fee u/s 234E of the Act while issuing intimation u/s 200A prior to 01-06-2015. It was thus held that amendment u/s 200A was prospective in nature and therefore, no computation of fee for demand or intimation u/s 200A could be made for the TDS deducted for the respective Assessment Years prior to 01-06-2015. Since no decision of jurisdictional high court is been shown to us, we follow the analogy of decision of Hon’ble Supreme Court rendered in CIT V/s Vegetable products Ltd. [1973 (1) TMI 1 - SUPREME COURT] to hold that in case of two reasonable constructions of taxing statutes, the one that favors the assessee must be adopted. Accordingly, we direct Ld. AO to delete the impugned fees and revise thd demand as raised against the assessee. Assessee appeal allowed. The Appellate Tribunal ITAT Agra, comprising Hon'ble Shri Satbeer Singh Godara, JM, and Hon'ble Shri Manoj Kumar Aggarwal, AM, addressed an appeal concerning the levy of late filing fees under Section 234E of the Income Tax Act related to TDS returns for the Assessment Year 2013-14. The appeal was delayed by 126 days, which was condoned.The core issue was the levy of late filing fees by the Centralized Processing Cell (CPC) while processing TDS returns, a decision affirmed by the CIT(A) due to a lack of explanation from the assessee. The Tribunal found that the issue was resolved in favor of the assessee by the Karnataka High Court in Fatehraj Singhvi vs. UOI, which held that the amendment to Section 200A, effective from 01-06-2015, was prospective. Therefore, no fees could be levied for late filing under Section 234E for periods before this date.The Tribunal noted a contrary decision by the Gujarat High Court in Rajesh Kourani vs. UOI but chose to follow the precedent set by the Supreme Court in CIT V/s Vegetable Products Ltd., which favors the interpretation that benefits the assessee in cases of ambiguity in taxing statutes. Consequently, the Tribunal directed the Assessing Officer to delete the fees and revise the demand against the assessee. All appeals were allowed as per this order, pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.