Jurisdiction To Levy Fee U/s 234E While Processing TDS Returns Is Prospective In Nature And Excludes Period Prior To June 01, 2015: Chandigarh ITAT
Pointing that though there has been a delay in filing TDS returns, however, the TDS return has been filed much before 1.6.2015 and none of the cases involved a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 01.06.2015, the Chandigarh ITAT ruled that there is no basis for levy of fees u/s 234E of Income tax Act, 1961.The Bench of Aakash...
Pointing that though there has been a delay in filing TDS returns, however, the TDS return has been filed much before 1.6.2015 and none of the cases involved a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 01.06.2015, the Chandigarh ITAT ruled that there is no basis for levy of fees u/s 234E of Income tax Act, 1961.
The Bench of Aakash Deep Jain (Vice President) and Vikram Singh Yadav (Accountant Member) observed that “even though the AO assume jurisdiction to levy fee u/s 234E with effect from 1.6.2015 and has the necessary jurisdiction to levy fee u/s 234E in the instant case while processing the TDS returns on 1/01/2017, at the same time, such jurisdiction has been held prospective in nature and the period prior to 1/6/2015 has to be excluded”. (Para 11)
As per the brief facts of the case, the assessee had challenged the action of the CIT(A), National Faceless Appeal Centre, Delhi in upholding the fee u/s 234E imposed on assessee by the DCIT (TDS), Ludhiana. The assessee pleaded that the notices u/s 200A for computation and intimation for payment of fee cannot be issued as the TDS returns relate to quarter ending before 01.06.2015. So, the fee imposed is liable to be quashed.
The Bench referred to a similar issue in case of Gita Star Hotels & Resorts Private Ltd., Jaipur vs. DCIT, CPC, TDS, Ghaziabad (ITA No. 14/JP/2017 dated 29.10.2018) where the TDS return (Form 26Q) for the fourth quarter of financial year 2012-13 was filed by the assessee on 26.12.2012 and the same was processed and intimation under section 200A was issued on 15.12.2013 much prior to the amendment to section 200A of the Act w.e.f. 1.6.2015 empowering the Assessing officer levying the fees under section 234E of the Act.
In that factual background, the Coordinate Bench held that it was not a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 1.6.2015 and therefore, deleted the demand for payment of fees under section 234E.
The Bench clarified that what need to be examined in the instant case is the time of the filing of the TDS returns and whether it is a case of continued default even after the period starting 1.6.2015 empowering the Assessing officer to levy the fees under section 234E of the Act.
“The undisputed facts which are emerging from the records is that in the first case, the TDS return (Form 24Q) for the 2nd quarter of financial year 2013-14 was filed by the assessee on 3.01.2015 and the same was processed and intimation under section 200A was issued on 01/01/2017. Similarly, in the second case, the TDS return (Form 24Q) for the 4th quarter of financial year 2013-14 was filed by the assessee on 02.01.2015 and the same was processed and intimation under section 200A was issued on 01/01/2017”, added the Bench.
Hence, the ITAT allowed the assessee's appeal and directed for deletion of fees u/s 234E.
Counsel for Appellant/ Taxpayer: J.K. Gupta
Counsel for Respondent/ Revenue: Amanpreet Kaur
Case Title: Batra Exports verses DCIT
Case Number: ITA Nos. 35 & 38/Chd/2022