Assessee company is engaged in the business of execution of construction work. For the period of 2012-13 & 2013-14, assessee filed its TDS return as required under the provisions of the Act. While processing the same, the AO charged fee under Section 234E of the Income Tax Act.
The assessee, however, contended that section 234E was brought into fold u/s 200A of the Act only w.e.f. 1.6.2015 and therefore, they cannot be made applicable retrospectively and no fee charged for the A.Ys 2012-13 and 2013- 14. They further relied on the decision of the Karnataka High Court in the case of Fatheraj Singhvi & Ors. Vs. Union of India & Ors wherein it was held that prior to 1.6.2015, no adjustment on account of fee u/s 234E could be made by the AO while processing the returns u/s 200A of the I.T. Act.
The AO however, rejected the application observing that there is no TDS provision under the IT Act to raise such objections. The view was supported by the Gujarat High Court decision in the case of Rajesh Kourani vs. Union of India wherein the levy of late fee even before the amendment in section 200A was upheld.
While disposing the case in favour of the assessee, the Tribunal held that “We find that though the provisions for levy of fee in certain cases has been brought into the Statute book w.e.f. 1.7.2012, it has been brought under the purview of section 200A only w.e.f. 1.6.2015. Therefore, as rightly held by the Coordinate Bench in the case of M/s. Sonalac Paintings & Coatings Ltd (cited Supra) we hold that the interest u/s 234E cannot be levied in respect of TDS returns filed prior to 1.6.2015.”Subscribe Taxscan AdFree to view the Judgment