Late Fee U/s. 234E for TDS Default Committed prior to 01/06/15 not leviable: ITAT

Sh. Rajesh Kumar Kukreja Vs. DCIT (TDS) (ITAT Delhi)

Admittedly the default has been committed by assessee prior to 01.06.2015. As the legal issue raised in the present case is squarely covered by the ratio by this Tribunal in the case of Gajanan Construction (supra), respectfully following the same we are also of the considered opinion that the Assessing Officer is not empowered to charge fees under section 234E of the Act by way of intimation issued under section 200A of the Act, in the case of present assessee since the default committed is prior to 01/06/15.

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

The present appeal has been filed by assessee against order dated 27/04/16 passed by Ld.CIT(A)-41, New Delhi for assessment year 2015-16 on the following grounds of appeal:

“1. The Ld.CIT(A) without appreciating the facts of the case is not justified in law and facts and circumstances of the case in confirming levy of late filing fee of Rs. 6,000/- u/s 234E of the I.T.Act.

2. Assessee has every right to make, add, delete, modify or alter any grounds of appeal at the time of hearing.”

2. Brief facts of the case are as under:

Assessee had filed the TDS returns belatedly which was accepted by TIN. Subsequently DCIT, Centralized Processing Cell– TDS, levied late fee of Rs. 6000/- for delay of 105 days as per intimation under section 200 A of the Act, issued on 2/11/2014.

2.1. Aggrieved by the order passed by Ld. DCIT, assessee preferred appeal before Ld.CIT (A) wherein it was submitted that the statutory provision of section 200 A was inserted by finance act 2015 w.e.f. 01/06/15 which was not retrospective in nature and hence the TDS statements filed prior to 01/06/15 could not be levied with any late fee charges under section 234E of the Act in an intimation issued under section 200 A of the Act.

2.2. Ld.AR placed reliance on : (i) the decision of the Coordinate Bench of this Tribunal in the case of Gajanan Construction vs. DCIT, CPC (TDS) (2016) reported in 73 Taxman.com 380 (Pune-Trib.)

(ii) in ITA 4050 to 4054/Del/2016 vide order date 9.11.2017 in M/s Samikaran Learning P Ltd. vs. TDS officer.

2.3. Ld.DR though referred to the decision relied upon by Ld. CIT (A) by Hon’ble Bombay High Court in the case of Rashmikant Kundalia versus Union of India reported in (2015) 373 ITR 268, could not controvert the observations made by Pune ITAT in the case of Gajanan Constructions vs. DCIT(supra).

3. We have perused the submissions advanced by both the sides in the light of records placed before us.

4. The issue that needs to be addressed here is whether assessing officer could charge late fee under provisions of section 234 E of the Act, where admittedly 1^stquarterly TDS returns filed by assessee was delayed.

4.1. Identical issue arose before Coordinate Bench of this Tribunal in the case of Gajanan Constructions vs. DCIT reported in (2016) 73 Taxmann.com 380 (Pune-Trib). This Tribunal while deciding the issue had considered the decision of Hon’ble Bombay High Court in the case of Rashmikant Kundalia (supra). The Tribunal decided the issue as under:

“36. Now, coming to the connected issue raised by the learned Authorized Representative for the assessee by way of ground of appeal No.1 that whether any appeal is maintainable against the intimation issued under section 200A of the Act and / or order passed under section 154 r.w.s. 200A of the Act by Assessing Officer in charging the fees under section 234E of the Act. Both the learned Authorized Representatives have raised varied arguments in respect of said issue and the learned CITDR has referred to the order of CIT(A), who had held that no appeal is maintainable against the order of Assessing Officer passed while processing the TDS returns / statements and charging of fees under section 234E of the Act. Without going into various aspects of the issue, we make reference to the Memorandum explaining the Finance Bill, 2015, under which the heading was rationalization of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS). The said memorandum categorically recognized that under the existing provisions of the Act, after processing of TDS statements, an intimation is generated specifying the amount payable or refundable. It was further noted that this intimation generated after processing TDS statement is (i) subject to rectification under section 154 of the Act; (ii) appeal able under section 246A of the Act; and (iii) deemed as notice of payment under section 156 of the Act. Under the amendment, similar position was given to the processing of TCS statements. In other words, the Legislature recognizes that a deductor who has filed his statement of tax deducted at source, which in turn, has been processed by the Assessing Officer and intimation 16 is generated under which, if any amount is found to be payable, then such intimation generated after processing of TDS returns is subject to rectification under section 154 of the Act and / or is also appeal able under section 246A of the Act, since the demand issued by the Assessing Officer is deemed to be a notice of payment under section 156 of the Act. Since the intimation in question issued by the Assessing Officer was appeal able order under section 246A(1)(a) of the Act, therefore, the CIT(A) should have examined the legality of adjustment made under intimation issued under section 200A of the Act. The CIT(A) has rejected the present set of appeals on the surmise that first of all, no appeal is provided against the intimation issued under section 200A of the Act. Further, the CIT(A) has also decided the issue on merits and the assessee is in appeal before us on both these grounds. Vis-à-vis the first issue of maintainability of appeal against the intimation issued under section 200A of the Act, we hold that such intimation issued by the Assessing Officer after processing the TDS returns is appeal able. The demand raised by way of charging of fees under section 234E of the Act is under section 156 of the Act and any demand raised under section 156 of the Act is appeal able under section 246A(1)(a) and (c) of the Act. Accordingly, we reverse the findings of CIT(A) in this regard. We find support from the similar proposition being laid down by Mumbai Bench of Tribunal in bunch of cases with lead order in M/s. Kash Realtors Pvt. Ltd. Vs. ITO in ITA No. 4199/M/2015, relating to assessment year 2013-14, consolidated order dated 27.07.2016, which had also decided the issue of charging of fees under section 234E of the Act in favour of the assessee following the decisions of other Benches of Tribunal. Once intimation issued under section 200A(1) of the Act is appeal able order before the CIT(A) under section 246A(1)(a) of the Act, then such appeal able order passed by the CIT(A) under section 250 of the Act is further appeal able before the Tribunal under section 253 of the Act. Hence, we admit the present appeals filed by the assessee even on this preliminary issue. We have already adjudicated the issue of charging fees under section 234E of the Act by the Assessing Officer while processing returns / statements in the paras herein above and in view thereof, we hold that the Assessing Officer is not empowered to charge the fees under section 234E of the Act by way of intimation issued under section 200A of the Act in respect of defaults before 01.06.2015, we allow the claim of assessee on both the aspects. The grounds of appeal raised by the assessee are thus, allowed.

4.2. Admittedly the default has been committed by assessee prior to 01.06.2015. As the legal issue raised in the present case is squarely covered by the ratio by this Tribunal in the case of Gajanan Construction (supra), respectfully following the same we are also of the considered opinion that the Assessing Officer is not empowered to charge fees under section 234E of the Act by way of intimation issued under section 200A of the Act, in the case of present assessee since the default committed is prior to 01/06/15.

4.3. Accordingly we allow the grounds raised by the assessee before us.

In the result appeal filed by the assessee stands allowed.

Order pronounced in the Open Court on 27^thDecember, 2017.