The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that late fees under section 234E of the Income Tax Act,1961 for the delay in filing of TDS return are not leviable before 01.06.2015.
Mr Hardik Chordia, CA appeared for the appellant and Dr K Shankar Prasad appeared for the respondent.
Karnataka Grameen Bank, the assessee filed a statement of tax deducted at source (TDS) for various quarters in Form No.26Q for AY 2013-14 to 2015-16 (Financial Years 2012-13 to 2015-16) in respect of its various branches. There was a delay in filing the above TDS statement and therefore the AO by intimation u/s. 200A of the Income-Tax Act, 1961 [the Act] levied late fee u/s. 234E of the IncomeTax Act, 1961.
Under Sec.234E of the Act inserted by the Finance Act, 2012 w.e.f. 1.7.2012., if there was a delay in filing the statement of TDS within the prescribed time then the person responsible for making payment and filing the return of TDS was liable to pay by way of fee a sum of Rs.200/- per day during which the failure continues.
The assessee contended before NFAC (CIT(A)/first appellate authority) that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by the provisions of Sec.200A(1)(c), (d) & (f) of the Act and those provisions came into force only from 1.6.2015.
The NFAC/CIT(A) upheld the levy of interest u/s.234E of the Act on the ground that if the return of TDS was filed after 1.6.2015, then the levy of interest u/s.234E is valid.
The Supreme Court held that any ambiguity in a taxing statute should ensure the benefit of the subject/assessee. On the contrary, any ambiguity in the exemption clause must be conferred in favour of revenue and such exemption should be allowed to be availed only to those subjects / assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and they satisfy all the conditions precedent for availing exemption.
In light of precedents, a Coram of Shri N V Vasudevan, vice president and Shri Chandra Poojari, accountant member held that the levy of interest u/s.234E of the Act cannot be sustained and directed to be deleted. The appeals were allowed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.
