The Income Tax Appellate Tribunal (ITAT), Pune Bench, has recently, in appeals filed before it, held that fee under Section 234E of the Income Tax Act is leviable, only for defaults committed after June 1st, 2015.
The aforesaid observation was made by the Pune ITAT, when appeals, by the assessee were filed before it, as against the orders passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi on 23-01-2023 and 21-02-2023, dismissing all the appeals at the threshold on account of delay in filing the first appeals ranging from minimum of 1973 days to maximum of 2881 days.
The issue involved in all the appeals being the charging of interest under Section 234E of the Income Tax Act in respect of above-mentioned Quarters of the assessment years, briefly stated, the facts of the case were that the assessee was engaged in the business of manufacture and sale of thermowares, and the TDS returns for the respective quarters were filed belatedly.
Based on that, subsequently, the Assessing Officer (AO), levied late fees under Section 234E of the Income Tax Act, 1961. And being aggrieved, the assessee approached the CIT(A) belatedly against the waiver of such fee.
However, since the appeals were time barred, the CIT(A) did not condone the delay and dismissed them in limine, thus leaving the assessee with the only option to prefer its appeals before the Pune ITAT.
Hearing the opposing contentions of both sides as submitted by Shri M.K. Kulkarni, on behalf of the assessee, and by Shri Ramnath P. Murkunde, on behalf of the Revenue, as well as perusing the materials available on record, the Pune ITAT observed, “Section 200A deals with processing of statements of tax deducted at source. Clause (c) of section 200A (1) was inserted by the Finance Act, 2015 w.e.f. 01-06-2015 providing for the levy of fee under Section.234E of the Act. In that view of the matter, such fee under Section.234E can be levied only for the default committed after 01-06-2015 and not prior to that. The Hon’ble Kerala High Court in Olari Little Flower KuriesPvt. Ltd. Vs. Union of India and others, has affirmed the non-imposition of fee for the period prior to 01-06-2015.”
Finally, the ITAT coram of R.S Syal, the Vice- President, and S.S Viswanethra Ravi, the Judicial Member, thus concluded and held:
“Similar view has been taken in Jiji Varghese VS. ITO (TDS) &Ors., holding that no interest under Section 234E can be imposed for the periods of the respective A.Ys. prior to June 1, 2015. Thus, the order of NFAC, Delhi is not justified in confirming the levy of fee under Section 234E of the Act and it is set aside.”
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