C. PANNEERSELVAM,KUNDAPURA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CPC-TDS, GHAZIABAD

Per Chandra Poojari, Accountant Member

“1. The order of the learned Commissioner of Income-tax [Appeals] passed under Section 250 of the Act in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case.

3. The learned CIT(A) failed to appreciate that Section 200A does not permit processing of TDS statement for default in payment of late fees for the period 01/01/2012 to 01/06/2015 & the levy of fees processed U/s 2001 for the above period, is liable to be deleted full, on the facts and circumstances of the case. 4. The learned CIT(A) erred in confirming the levy of fee u/s. 234E of the Act amounting to Rs.28,200/ computed by the learned assessing officer on the facts and circumstances of the case. 5. Without Prejudice, the learned Commissioner of Income- tax [Appeals] failed to appreciate that there was no enabling provision prior to 01/06/2015 to recover fee u/s. 234E and that the levy of 234E for the impugned year being prior to 01/06/2015 needs to be quashed on the facts and circumstances of the case. 6. For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.” 2. The facts of the case are that the assessee filed TDS Form for the quarter Q4 2014-15 on 3.10.2015 which is beyond the due date i.e. 15/05/2015. There was a delay of 141 days. The AO levied late fee u/s. 234E @ Rs.200 per day for 141 days aggregating to Rs.28,200. The assessee submitted that the AO has no power to charge the said fees while processing the TDS returns u/s. 200A of the Act prior to the substitution of clause (c) to Section 200A(1) vide Finance Act, 2015. The CIT(Appeals), NFAC dismissed the appeal of the assessee. Against this, the assessee is in appeal before us.

The AO cannot make any adjustment other than the one prescribed above in Section 200A. By Finance Act, 2015, with effect from 01.06.2015, the Parliament amended Section 200A by substituting sub-section (1) of clauses (c) to (e). Therefore, it is obvious that prior to 01.06.2015, there was no enabling provision in Section 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E. The Parliament for the first time enabled the AO to make adjustment by levying fee u/s 234E with effect from 01.06.2015. Thus, while processing statement under Section 200A, the AO cannot make any adjustment by levying fee u/s 234E prior to 01.06.2015. Therefore, this Tribunal was of the considered opinion that the fee levied by the AO u/s 234E while processing the statement of tax deducted at source was beyond the scope of adjustment provided u/s 200A . Therefore, such adjustment cannot stand in the eye of law.

Pronounced in the open court on this 27th day of December, 2021.