In a recent ruling, the Cochin bench of the Income Tax appellate Tribunal has held that late fee cannot be levied for the default in filing TDS statements under section 243E of the Income Tax Act as per the amended provisions of section 200A, inserted vide Finance Act, 2015. The Tribunal opined that the amended provision have only prospective application.
The assessee, in the instant case is a charitable society, who had deducted tax from payments
made to contractors and filed TDS statement for the year 2012-13. However, the Dy Commissioner of Central Processing Cell (TDS) imposed late fee on the assessee under s. 234E of the Act based on amendment made to section 200A of the Act in the Finance act, 2015.
The Commissioner of Income Tax (Appeals) confirmed the levy of fees while dismissing the appeal. Being aggrieved, the assessee approached the Appellate Tribunal on second appeal.
In the opinion of the Tribunal there was no enabling provision therein for raising a demand in respect of levy of fees u/s 234E of the Act prior to the date of the said amendment and therefore, the amendment to s.200A is not applicable to the present case.
The Tribunal further noticed the decision of the Amritsar bench in the case of Sibia Healthcare (P) Limited Vs. Deputy Commissioner of Income Tax, in which it was held that levy of fee u/s. 234E is beyond the scope of permissible adjustments contemplated u/s.200A.a similar view was taken by the Ahmedabad and Chennai benches in their decisions.
In view of the above findings and judicial pronouncements, the Tribunal quashed the impugned order in which the officer imposed late fee on filing TDS statement.
Read the full text of the order below.
