Exception to Fees Levied for Late Filing of TDS Prior to 1.6.2015: ITAT Sets Aside Notice [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that no fee shall be levied under Section 234E of Income Tax Act, 1961 on late Filing of Tax Deducted at Source (TDS) prior to 01.04.2015 and set aside the demand notice issued under Section 200A of the Income Tax Act,1961.

The assessee M/s. Lifeline Medicare Hospitals Private Limited Company is engaged in the business of running and managing hospitals and medication centres in Mumbai. During the scrutiny assessment the Assessing Officer (A.O) has raised a demand of Rs.77, 600/- under Section 200A of Income Tax Act on account of fees payable under Section 234E of the Income Tax Act for delay in filing quarterly TDS statement.

The assessee filed an appeal before The Commissioner of Income Tax (Appeals) [CIT (A)] and contended that Section 234E of the Income Tax Act was made effective only from 01.06.2015 and that the same cannot be levied by way of processing of correction statement under Section 200A of the Income Tax Act.

The assessee further contended that levy under Section 200A of the Income Tax Act for outstanding fees calculated under Section 234E of the Act prior to 01.06.2015 was unwarranted and relied on the various decisions of the Tribunal which held that no fee was leviable 200A of the Income Tax Act 234E of the Act in violation of section 200(3) of the Income Tax Act, if it is found that the assessee has furnished the TDS statement after paying the taxes without any delay.

The Commissioner of Income Tax (Appeals) [CIT (A)] declined the contentions of assessee and held that Section 234E of the Income Tax Act being a charging provision was applicable w.e.f. 01.07.2012, where the A.O. was empowered to levy fee for delay in filing quarterly TDS statement within the prescribed time under Section 200(3) of the Income Tax Act. Aggrieved by the order the assessee filed an appeal before Income Tax Appellate Tribunal (ITAT).

The ITAT bench comprising of Shri Prashant Maharishi, (Accountant Member) and Ms. Kavitha Rajagopal,(Judicial Member) relied on the decision given in case of Fatheraj Singhvi vs. Union of India wherein it was held that  “no computation of fee for the demand or the intimation for the fee under Section 2343E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent authority for intimation for payment of fee under Section 234E can be said as without any authority of law”.

Hence the Tribunal set aside the impugned notice under Section 200A of the Income Tax Act levied for demanding fees under Section 234E of the Income Tax Act for belated filing of the TDS statement prior to 01.04.2015.

To Read the full text of the Order CLICK HERE

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