The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the levy of late fee under section 234E of the Income Tax Act, 1961 cannot be levied for TDS defaults prior to 1st June 2015, i.e., date of implementation of the amended provision introducing the levy.
The assessee, an individual, approached the Tribunal against the orders of the Assessing Officer and the first appellate authority wherein demand alongwith a late fee was imposed on him for delay in filing the TDS statement while complying with the quarterly statement of Deduction of Tax at Source (TDS) for the quarter ending 31.03.2015 in Form 26Q on 30.10.2015.
Before the Tribunal, the assessee pleaded that he has no full time qualified accountant and also pleaded ignorance of penal provisions and consequence of late deposit of TDS deducted, non/late filing of statement etc., because of low business turnover and incurring of cash loss during the year. It is also not in dispute that assessee has already deposited TDS along with interest for the delayed period.
The division bench of the Tribunal comprising Accountant Member R K Panda and Judicial Member Kuldip Singh relied on the judgments of the various High Courts wherein the Courts have delivereddifferent views on a similar issue.
Concluding the issue in favour of the assessee, the bench held that “so, in these circumstances, we are of the considered view that following the decision rendered by Hon’ble Supreme Court in the case of Vegetable products Limited 88 ITR 192 (SC) that when there are conflicting decisions, the view taken in favour of the assessee should be followed, the impugned order passed by the ld. CIT (A) confirming the late fee levied by the AO u/s 200A read with section 234E as the defaults are prior to 01.06.2015, is not sustainable in the eyes of law, hence fee levied u/s 234E is ordered to be deleted. Consequently, the appeal filed by the assessee is allowed.”
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