AO has No Jurisdiction to make adjustment of fees leviable u/s 234E while processing the TDS statements: ITAT Mumbai [Read Order]

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The Mumbai bench of the Income Tax appellate Tribunal has recently observed that, fees under section 234E of the Income Tax act, 1961 in respect of defaults in furnishing TDS statements, could not be levied in intimation under section 200A of the Act, for the period prior to 01.06.15.

In the instant case, the period involved is after 01.07.12, but prior to 01.06.15, in which the assessees were failed to file TDS returns. As per section 234E, which were added to the the Income Tax Act on 1.7.2012, fees payable under section 234E can be adjusted while processing intimation under section 200A w.e.f. 1.6.2015. During the course of the processing of the TDS returns, the Assessing Officer (TDS)levy of fees under section 234E Income Tax Act by way of an intimation issued under section 200A of the Act for delay in filing of TDS statement beyond the period stipulated as per the provisions of section 200(3) of the Income Tax Act.

On appeal, the CIT(A) confirmed the order and therefore, the assessees filed second appeal before the Appellate Tribunal by contending that the fees leviable under section 234E cannot be adjustedwhile processing the TDS statements under section 200A of the Income Tax Act.

The Tribunal noticed that Amritsar Bench of ITAT in the case of “Sibia Healthcare Pvt. Ltd. vs. DCIT” (supra) has held that in the absence of enabling provision under section 200A prior to 01.06.15 such apower was not vested with the AO (TDS). Later, in the case of Smt. G. Indhirani &Others vs. DCIT, CPC-TDS” in ITA No.109/Mas/2015 & others, the ITAT, Chennai also upheld this position.

By following the above decisions, the Tribunal held that the Assessing Officer, in the present case has exceeded his jurisdiction in making adjustments of fees leviable under section 234E while processing the TDS statements under section 200A of the Income Tax Act. Accordingly, the adjustments made by the lower authorities of fees leviable under section 234E Income Tax Act while processing the intimation under section 200A were set aside by the Tribunal.

Read the full text of the order below.

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