Section 234E late-fee adjustment under section 200A was impermissible for pre-01.06.2015 TDS statements

Fee under section 234E could not be levied while processing TDS statements under section 200A for periods prior to 01.06.2015 because, before the Finance Act, 2015 amendment, section 200A did not contain the enabling mechanism for such adjustment. The ITAT relied on coordinate bench rulings and noted the absence of any contrary jurisdictional High Court decision. The late-fee demand was therefore held unsustainable for the pre-amendment period, and the Revenue's appeals were dismissed, sustaining deletion of the demand in favour of the assessee.

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Issues: Whether late fee under section 234E of the Income-tax Act, 1961 could be levied while processing TDS statements under section 200A for the period prior to 01.06.2015.

Analysis: The fee was deleted on the footing that the amendment to section 200A by the Finance Act, 2015 with effect from 01.06.2015 introduced the enabling mechanism for such adjustment, and that prior thereto section 200A did not authorise levy of fee under section 234E while processing the statement. The conclusion was also supported by coordinate bench decisions, and the Revenue did not point to any contrary decision of the jurisdictional High Court.

Conclusion: The levy of fee under section 234E for the period prior to 01.06.2015 was not sustainable in processing under section 200A, and the deletion was upheld in favour of the assessee.

Final Conclusion: The appeals filed by the Revenue were dismissed, and the deletion of the late fee demand was sustained.

Ratio Decidendi: In the absence of an enabling provision in section 200A prior to 01.06.2015, fee under section 234E could not be adjusted while processing TDS statements for that period.

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