The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the late fee under Section 234E of the Income Tax Act cannot be imposed without passing a speaking order.
The sole grievance of the assessee, in the instant case was that the Assessing Officer levied late fee under section 234E of the Income Tax Act by processing TDS statement under section 200A, without issuing show cause notice. The first appellate authority confirmed the order.
Before the Tribunal, the assessee contended that the late fee under section 234E is penal in nature which cannot be levied without passing of speaking order just by processing TDS statement.
The bench noted that the period of delay in question is prior to 1st June 2015, i.e. prior to the period in which the relevant amendment in section 200A was made.
The bench noticed the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT wherein it was held that a levy under section 234E could not be effected in the course of intimation under section 200A. “As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law,“ the ITAT said.
Following the above decision, the bench deleted the impugned levy of late filing fees under section 234E of the Act.
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