Recently, in Vidya Vardhani Education and Research Foundation & Ors v. DCIT, the division bench of the Pune ITAT held that late fee under section 234E of the Income Tax Act cannot be levied in respect of TDS statements filed before 01.06.2015 since the said section does not have retrospective effect.
The bench was hearing a bunch of appeals filed against the proceedings under section 200A(3) of the Income-tax Act, on the issue of charging of late fees under section 234E of the Act for belated filing of TDS returns. The appellants, relying upon various decisions, contended that late fee cannot be levied in respect of TDS statements which were filed prior to 01.06.2015 since the provision is not retrospective in nature.
Allowing the appeals, the bench said, “the Legislature had inserted clause (c) to section 200A(1) of the Income Tax Act specifically w.e.f. 01.06.2015 and the case of assessee before us was that in such circumstances where the said amendment was introduced w.e.f. 01.06.2015 and there was nothing to suggest that the said amendment was clarificatory or retrospective in nature, then no such late fees could be charged under section 234E of the Income Tax Act in respect of TDS statements which were filed prior to 01.06.2015.”
The bench recalled its order in Maharashtra Cricket Association Vs. DCIT wherein it was held that section 234E of the Act have prospective application only.
Based on the above decision, it was held that “where the amendment to section 200A(1) of the Income Tax Act is procedural in nature, then the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Income Tax Act.
Accordingly, intimation issued by the Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging the fees under section 234E of the Act is not valid and the same is deleted.”
Read the full text of the order below.
