The Income Tax Appellate Tribunal (ITAT), Pune Bench, has recently, in an appeal filed before it, held that the levy of fees under Section 234E for delayed furnishing, in the absence of enabling provision of Section 200A (1) (c), is unlawful.
The aforesaid observation was made by the Pune ITAT, when a bunch appeals were filed before it, all assailing against the respective orders of Commissioner of Income Tax (Appeals) [CIT(A)], passed under Section 250 of the Income-tax Act, 1961, which ascended out of respective orders of intimation processed by the ITO (TDS)-1, Pune [AO], for various quarters pertaining to the assessment years 2013-14 to 2015-16.
The ground of the appeal being that on the facts and circumstances prevailing in the case and as per the provision of the Income Tax Act, the late fee levied under Section 234E and confirmed by the first appellate authority is not according to framework of the Income Tax Act, the appellant pleaded that the penalty so levied be deleted, and the appellant be granted just and proper relief.
The aforesaid being the issue involved in the appeals, the facts in brief pertaining to the same were that the appellant assessee failed to deliver the TDS statements within the time limit specified in subsection (3) of Section 200. And consequently, against such default, the AO levied late filing fees under Section 234E of the Income Tax Act.
Aggrieved by the said levy, the assessee carried the matter unsuccessfully before the first appellate authority [FAA]. And it is for the reason, that the appellant is presently before Pune ITAT, challenging the levy of fees in the absence of authority and enabling provisions.
Hearing the opposing contentions of both sides as presented by Shri Sarvesh Khandelwal, on behalf of the assessee, and by Shri Ramnath P Murkund, on behalf of the Revenue, as well as perusing the materials available on record, the ITAT observed:
“It shall serve to state that, a person liable to deduct any sum under the provisions of chapter XVII of the Income Tax Act, is under obligation to deliver or furnish a statement under Section 200(3) of the Income Tax Act within the due date prescribed therein and in the event of default, is exposed to section 234E of the Income Tax Act. Although the levy of fees under Section 234E of the Income Tax Act for delay in furnishing statement has been brought into statute w.e.f. 1st July, 2012, the enabling provision of section 200A(1)(c) authorising such levy came into force w.e.f. 1st June, 2015 by Finance Act, 2015, consequently the fees levied for any default prior thereto being sine auctoritate hence unsustainable in the eyes of law.”
“As it is clearly discernable from the above tabulation that, in respect of any assessment year the levy of fees for delayed filing of TDS statement can only be permissible where such statement is filed after 31st May, 2015. Undisputedly, in the present case, the regular TDS statement was first filed much before aforestated deadline of 31st May 2015, however the Ld. AO processed the statement and unlawfully levied the fees under Section 234E for delayed furnishing in the absence of enabling provision of section 200A(1)(c) of the Income Tax Act. Such levy in the light of aforestated discussion suffers from infirmity and bad in law, in the light of decision of Hon’ble High Court of Karnataka in FatherajSinghvi&Ors Vs UOI”, the coram of S. S. Viswanethra Ravi, the Judicial Member, and G. D. Padmahshali,the Accountant Member added.
Thus, the Pune ITAT finally held:
“In the absence of any contrary facts brought to our notice by the Ld. DR, all these appeals shall also succeed mutatis mutandis. Resultantly, this bunch of four appeals stands allowed.”
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