The ITAT at Pune explains the law on whether late fee for filing of TDS returns can be levied before 01.06.2015

The Income Tax Appellate Tribunal at Pune in the case of Gajanan Constructions, 6, Shivaji Road, Damodhar Chambers, Nashik – 4212 001, having PAN: AGGPK7326M and others vs. DCIT, CPC (TDS), Ghaziabad, Uttar Pradesh vs. DCIT in connection with the assessment years 2013-14 explained the law on whether late fee for filing of TDS returns can be levied before 01.06.2015.

The judgment also explained whether the intimation issued under section 200A was appeal able.

The bench comprising of Shri R.K. Panda, Accountant Member and Shri Vikash Awasthy, Judicial Member passed the aforesaid judgment on 23.09.2016.

Date of publication of judgment:

The judgment was published on 21.10. 2016.

Pleaders engaged:

The Assessee was not represented by anyone in the Written Submission. However Revenue was represented by Shri P.L. Kureel.

Date of Hearing:

The appeals were taken up on different dates such as 29.08.2016, 30.08.2016, 06.09.2016 and 8.09.2016.

Backgrounds of the case:

The appeals were filed by many assessee against their respective orders passed by the ld. CIT (A) relating to different assessment years against intimations issued under the provisions of section 200A(3) of the Income Tax Act,1961.

The appeals were heard together and were disposed of by a consolidated order due to the reason that the issue raised in all the appeals were similar.

However there was a delay of 3 days in filing of appeal in ITA No.1337/PN/2015 to ITA No.1339/PN/2015 for which the assessee had to file a petition for condonation of delay.

After considering the petition filed by the assessee, the delay in filing of appeals was condoned and the appeals were admitted accordingly.

As the Legislature had inserted clause (c) to section 200A (1) with effect from 1.6.2015, therefore, TDS statements filed before 1.6.2015, late fees under section 234E would not apply in the intimation issued under section 200A.
The issue of the appeals was mainly against the intimation that was issued under section 200A of the Act and the order that was passed under section 154 of the Act for levying fees payable under section 234E of the Act.

The Tribunal took up ITA No.1292/PN/2015 for adjudication as the leading case. The issue that rose in the appeals was levying fees under section 234E of the Act before the amendment to section 200A(1)(c) of the Act vide Finance Act, 2015 with effect from 1.6.2015 at the time of processing the TDS returns.

The assessee stated that the Legislature had inserted clause (c) to section 200A (1) with effect from 1.6.2015 and for TDS statements filed before 1.6.2015, late fees charged under section 234E would not apply in the intimation issued under section 200A.

To adjudicate the main issue of the appeals, some facts are to be noted. The assessee was required to deduct tax at source from the payments made towards salary, interest, etc. for the accounting period.

The Act puts an obligation on the assessee to file TDS returns every quarter informing the TDS from payments made in each quarter. The said TDS returns are to be filed within due time.

Admittedly, in the appeals TDS returns were filed late. The Assessing Officer at the time of processing the TDS returns intimated the assessee under section 200A of the Act and levied late filing fees under section 234E of the Act.

Being aggrieved by the intimation, the assessees filed applications under section 154 of the Act and the same was dismissed by the respective Assessing Officers.

In appeal, the ld. CIT(A) dismissed the appeal of assessee as per the view laid down by the Hon’ble Bombay High Court in the case of Rashmikant Kundalia vs. Union of India (2015), 54 Taxman.com 200.

Moreover, the contention of assessee that the Assessing Officer could not raise the demand under section 234E of the Act was also held to be not maintainable. Thereafter the assessee preferred an appeal against the orders of the lower authorities.

The learned Counsel pointed out that the issue that arose in the appeal was whether the appeal filed was maintainable and whether any fees could be levied as per section 234E of the Act before 1.6.2015, at the time of issuing intimation under section 200A of the Act.

The learned Counsel pointed out the provisions of section 200(3) of the Act, wherein the assessee was under the obligation to file the TDS statement within due time.

Rule 31A of the Income Tax Rules, 1962 was referred by the said counsel that provides the time limit to file the statement of TDS.

The learned Counsel also pointed out that the Act requires TDS statement to be filed quarterly within 15 days of close of each quarter.

The Authorized Representative for the assessee pointed out that clause (c) to section 200A (1) of the Act was inserted with effect from 1.6.2015 which states that before that, there was no provision of levy of such fees.

The assessee also pointed that there is nothing to suggest that the said amendment was retrospective, hence for the TDS statements filed for the period before 1.6.2015, late fees charged under section 234E of the Act would not apply according to the Act.

The Ld. Counsel for the assessee placed reliance on the principle laid down by Chennai Bench of Tribunal in the case of G. Indirani vs. DCIT (2015) 43 CCH 511 (Chen-Trib.)

The judgment:

In view of the above, the appeals filed by the assessee were admitted.  The issue of charging fees under section 234E of the Act by the Assessing Officer at the time of processing statements was adjudicated and it was held that the Assessing Officer was not empowered to levy the late fees under section 234E of the Act through an intimation issued under the provisions of section 200A of the Act for the defaults prior to 1.6.2015.

Accordingly, the claim of assessee was allowed. The grounds of appeal of the assessee were all allowed.

Moreover, all the appeals of the different assessees in connection different years were allowed. The Order was pronounced in open court on 23.9. 2016.

Also read:

The consequences of late filing of TDS returns or statements