No Section 234E late fees for delayed TDS Statement filed before 31.05.2015

Klug Avalon Mechatronics Private Limited Vs ITO (ITAT Pune)

ITAT held that a person is liable to deduct any sum under the provisions of chapter XVII of the Act, is under obligation to deliver or furnish a statement u/s 200(3) of the Act within the due date prescribed therein and in the event of default, is exposed to section 234E of the Act. Although the levy of fees u/s 234E of the Act for delay in furnishing statement has been brought into statute w.e.f. 1^st July, 2012, the enabling provision of section 200A(1)(c) authorising such levy came into force w.e.f. 1^st 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.

So in respect of any assessment year the levy of fees under Section 234E  for delayed filing of TDS statement can only be permissible where such statement is filed after 31^st May, 2015.

Undisputedly, in the present case, the regular TDS statement was first filed much before aforestated deadline of 31^st May 2015, however the Ld. AO processed the statement and unlawfully levied the fees u/s 234E for delayed furnishing in the absence of enabling provision of section 200A(1)(c) of the Act. Such levy suffers from infirmity and bad in, ergo ITAT delete the levy.

FULL TEXT OF THE ORDER OF ITAT PUNE

The present bunch appeals by different assessees are assailed against respective orders of Commissioner of Income Tax (Appeals) [for short “CIT(A)”] passed u/s 250 of the Income-tax Act, 1961 [for short “the Act”], which ascended out of respective orders of intimation processed by the ITO (TDS)-1, Pune [for short “AO”] for various quarters pertaining to assessment years [for short “AY”] 2013-14 to 2015-16.

2. Since the facts and issue involved in these bunch of four appeals are identical hence for convenience at the request of both the parties hereto, is heard together for a consolidated order.

3. We first espouse ITA No.149/PUN/2023 seeking to adjudicate the issue of authorisation of levy of fees u/s 234E for default in furnishing statement u/s 200(3) in the absence of enabling provision.

4. Before we proceed for adjudication, it is essential to reproduce the grounds challenged by appellant, as;

“1. On facts and circumstances prevailing in the case and as per the provision of the Act, the late fee levied u/s.234E and confirmed by the first appellate authority is not according to framework of the Act. The penalty so levied shall be deleted. The appellant shall be granted just and proper relief..

2. The appellant prays to be allowed to add, amend, modify, rectify, delete and raise any grounds of appeal at the time of hearing.”

5. Having laid the grounds, the succinctly stated facts of the case are; the appellant assessee failed to deliver the TDS statements within the time limit specified in sub­section (3) of section 200, consequently against such default, the Ld. AO levied late filing fees u/s 234E of the Act. Aggrieved by the said levy, the assessee carried the matter unsuccessfully before the first appellate authority [for short “FAA”], for the reason the appellant is before thisTribunal challenging the levy of fees in the absence of authority and enabling provisions.

6. We have heard the rival contentions of both the parties; and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short “ITAT, Rules”] perused the material placed on record.

7. It shall serve to state that, a person liable to deduct any sum under the provisions of chapter XVII of the Act, isunder obligation to deliver or furnish a statement u/s 200(3) of the Act within the due date prescribed therein and in the event of default, is exposed to section 234E of the Act. Although the levy of fees u/s 234E of the Act for delay in furnishing statement has been brought into statute w.e.f. 1^st July, 2012, the enabling provision of section 200A(1)(c) authorising such levy came into force w.e.f. 1^st 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. For the sake brevity the applicability of provisions can be adumbrated as;

8. 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 31^st May, 2015.

9. Undisputedly, in the present case, the regular TDS statement was first filed much before aforestated deadline of 31^st May 2015, however the Ld. AO processed the statement and unlawfully levied the fees u/s 234E for delayed furnishing in the absence of enabling provision of section 200A(1)(c) of the 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 “Fatheraj Singhvi & Ors Vs UOI” reported in 289 CTR 602, ergo we delete the levy.

8. Since in remaining all the appeals i.e. ITA No 150 & 151/PUN/2023 and 166//PUN/2023, the initial TDS statement for the respective quarter were filed much before the deadline date i.e. 31^st May, 2015. In the absence of any contrary facts brought to our notice by the Ld. DR, all these appeals shall also succeed mutatis mutandis.

9. Resultantly, this bunch of four appeals of different assessee stands allowed in above terms.

In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday 05^th day of April, 2023.