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Facts
The assessee filed appeals against the orders passed by the CIT(A) for AY 2014-15. No one appeared on behalf of the assessee, so the proceedings were exparte. The sole issue was the levy of late fee under Section 234E read with Section 200A of the Income Tax Act.
Held
The Tribunal held that the authorities had no power to impose late fee under Section 234E for assessment years prior to the introduction of Section 200A(1)(c) with effect from 01.06.2015. Reliance was placed on various High Court and ITAT judgments.
Key Issues
Whether late fee under Section 234E could be levied for assessment years before the introduction of Section 200A(1)(c), considering it was introduced prospectively.
Sections Cited
234E, 200A, 147, 148, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL
PER MAHAVIR SINGH, VICE PRESIDENT :
These appeals have been filed by the Assessee against the respective orders passed by the CIT(A), Delhi for the assessment year 2014-15.
None appeared on behalf of the assessee, despite issue of notice for hearing, hence, we are proceeding, exparte qua the assessee, after hearing the ld. DR. 3. Upon careful consideration, it comes up that the sole issue, involved for adjudication in these appeals, relating to levy of late fee u/s 234E r.w.s. 200A of the Income Tax Act, 196, is squarely covered in favour of the assessee by the order of the Tribunal dated 15.02.2024, rendered in the case of ATN Infratech Ltd. Vs. ACIT in for A.Y. 2015-16 (4th quarter/Form no. 24Q) wherein, the Tribunal allowed the assessee's appeal by deleting the late fee levied u/s 234E, inter alia, observing as under:
"6. Ld. AR has submitted that under section 200A of the Act, which deals with the manner in which the statement of Tax Deducted at Source (TDS) shall be processed, the Authorities have no power to impose the late fee under section 234E of the Act for the assessment years 2012-2013 to 2015- 16, since section 200A(1) (c) of the Act was introduced only with effect from 1-6-2015. Accordingly, any fee under Sec 234E could have been levied only prospectively, for periods beyond 01.06.2015, which is not the case of the case. Accordingly, the levy of fee on the assessee is invalid and thus, deserves to be deleted. It is submitted that no fee under Sec 234E of the Act can be levied before 01.6.2015. In this respect, reliance is placed on the judgment of Hon'ble High Court of Madras in the case True Blue Voice 1597 & 1598/Del/2023 India (P.) Ltd. Vs CCIT, [2024] 158 taxmann.com 67 (Madras). Ld. AR referred to following observations of Hon'ble High Court in this judgment. "15. The learned counsel for the respondent advanced his arguments on the aspect of the imposition of late fee by applying section 200A(l) (c) of the Act retrospectively. This Court is not in agreement with the said submissions of the respondent. Since, there was no provision for imposing the late fee under section 234E of the Act while filing and processing the TDS returns under section 200A of the Act, clause (c) to sub-section (1) to section 200A was introduced with effect from 1-7-2012. Therefore, the aforesaid submission made by the learned counsel for the respondent is rejected by this Court.
In view of the above, it is made clear that the respondent had had imposed the late fee only under section 234E of the Act for the assessment years 2012- 2013, 2013-2014, 2015- 2015. However, section 2 | P a g e 200A(L)(c) of the Act was not introduced during the said assessment years. In the absence of any provisions under section 200A of the Act, when they have processed the application for TDS under section 200A, no late fee can be imposed under section 234E. Hence, in such view of the matter, this Court feels that the impugned orders are liable to be set aside." 6.1 Further reliance is placed on Amaravati vs ITO, High Court of Kerala, [2022] 142 taxmann.com 81 (Kerala); Atlas Brands (P.) Ltd. Vs CIT, High Court of Karnataka, [2022] 137 taxmann.com 191 (Karnataka); Franchise India Brands Ltd. Vs CPC, ITAT Delhi, [2020] 122 taxmann.com 196 (Delhi - Trib.) Govt. Girls Sr. Secondary School Vs ACIT, ITAT Delhi, [2020] 121 taxmann.com 170 (Delhi - Trib.) 7. In the light of aforesaid, we are of the considered view that the Ld.CIT(A) has fallen in error in sustaining the levy of penalty in ITA No.878/Del/2023. ..... "
Respectfully following the aforesaid precedents, we set aside the orders of the authorities below and late fee levied u/s. 234E is hereby deleted in both the appeals.
In the result, both the Assessee’s appeals are allowed. Order pronounced in the Open Court on 13.05.2025.