Prospective levy of late fee for TDS defaults under section 200A applies only from 01.06.2015 onward.
Delay in filing the first appellate appeals was condoned on the basis of reasonable cause and interest of justice. On the levy of late fee for TDS statements, the amendment enabling fee collection through processing under section 200A was treated as prospective from 01.06.2015. Fee attributable to default before that date was held unsustainable and directed to be deleted, while fee for delay occurring after 01.06.2015 was to be recomputed and sustained only for the post-amendment period.
Issues: (i) Whether the delay in filing the appeals before the first appellate authority deserved to be condoned. (ii) Whether fee under section 234E could be levied while processing TDS returns under section 200A for the period prior to 01.06.2015, and for returns processed on or after that date the fee could be sustained only for the post-01.06.2015 period of default.
Issue (i): Whether the delay in filing the appeals before the first appellate authority deserved to be condoned.
Analysis: The explanation for delay was accepted as constituting reasonable cause. The delay was condoned in the interest of justice, following the settled approach that meritorious matters should not fail on technical delay where sufficient cause is shown.
Conclusion: The delay was condoned, in favour of the assessee.
Issue (ii): Whether fee under section 234E could be levied while processing TDS returns under section 200A for the period prior to 01.06.2015, and for returns processed on or after that date the fee could be sustained only for the post-01.06.2015 period of default.
Analysis: The amendment to section 200A inserting the machinery to levy fee under section 234E was treated as prospective from 01.06.2015. On that footing, fee levied for the period of default falling before 01.06.2015 was held unsustainable, while for returns processed on or after 01.06.2015 the fee could be recomputed and sustained only for the period of delay occurring from 01.06.2015 up to the date of filing of the TDS return.
Conclusion: Fee under section 234E levied for the pre-01.06.2015 period was directed to be deleted, and the fee for the post-01.06.2015 period was directed to be recalculated and sustained, in favour of the assessee in part.
Final Conclusion: The appeals were allowed in part, with relief granted on the levy of late fee for the pre-01.06.2015 period and recomputation directed for the remaining period of default.
Ratio Decidendi: The power to levy fee under section 234E through processing under section 200A is prospective from 01.06.2015, so any fee attributable to default before that date cannot be sustained, while delay continuing thereafter can be subjected to fee for the post-amendment period.
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