Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that late fee cannot be levied during processing of the Tax Deducted at Source (TDS) statement prior amendment in section 200A of the Income Tax Act 1961.
Assessee in the present case is an educational and welfare society. During the course of Assessment Proceedings the Assessing Officer (AO) has charged late fees under section 234E of the act. On appeal the CIT (A) also confirmed the levy of fees charged by the AO.
Aggrieved by the assessee was on appeal before the tribunal contending that Section 200A of the Act which deals with processing of statements of tax deducted at source had been subsequently amended by the Finance Act, 2015 and new clauses had been inserted in the said section. The clarification by processing of TDS statement, the fee, if any shall be computed in accordance with the provisions of section 234E of the act.
After considering the material facts and records the tribunal bench consists of Judicial Member Beena A. Pillai and Accountant Member N.K.Saini ruled that the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS returns for the period prior to the amendment of Finance Act 2015 was not empowered to charge fees under section 234E of the Income Tax Act. Hence the intimation issued by the Assessing Officer under section 200A of the act is not valid. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law, the bench said.
