The Income Tax Appellate Tribunal (ITAT), Jodhpur bench, held that late fees under Section 234E of the Income Tax Act, 1961, towards the belated filing of Tax Deduction at Source return should not be levied prior to 01.06.2016.
Assessee Sushil Kumar Marlecha has filed the Quarter 4 form in 26Q. Against that TDS return, an intimation under Section 200A was issued, levying fees under Section 234E of the Income Tax Act for an amount of Rs. 18,800/- and interest of Rs. 4,977/.
Aggrieved by the order, the assessee filed an appeal before the CIT(A), who dismissed the appeal of the assessee. Thereafter, the assessee filed an appeal against the CIT(A) order before the tribunal.
When the matter was considered before the tribunal, Amit Kothari, Counsel for the assessee, argued that the power to charge fee u/s 234E of the Act came into effect on 01.06.2015, and therefore, since the amendment is prospective, the same cannot be applied for the year under consideration.
On the contrary, S.M. Joshi, Counsel for Revenue, supported the decision of the lower authorities. It was observed by the tribunal that the power to levy the said late fees under Section 234E of the Income Tax Act came into effect from 01.06.2015. Therefore, this provision is prospective in nature.
After reviewing the facts and records, the two-member bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) held that the late fees under Section 234E of the Income Tax Act could not have been levied in the intimation under Section 200A of the Income Tax Act for the delay in filing quarterly returns of TDS. The said power to levy fees has come into effect from 01.06.2015. Therefore, the bench vacated the levy under Section 234E of the Income Tax Act.
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