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Facts
The assessee appealed against the order of the CIT(A) levying late fees under Section 234E of the Income Tax Act for AYs 2013-14 and 2014-15. The CPC passed these orders under Section 200A of the Act.
Held
The Tribunal held that Section 200A of the Act, which empowers the levy of late fees, was introduced only with effect from 01.06.2015. Therefore, for the assessment years 2013-14 and 2014-15, the CPC could not have imposed late fees under Section 234E.
Key Issues
Whether late fees under Section 234E could be imposed for AYs 2013-14 and 2014-15 when Section 200A was introduced later.
Sections Cited
200A, 234E
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R PER ABY T. VARKEY, JM: These are appeals preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 04.06.2025 for the Assessment Year (hereinafter referred to as "AY”) 2013-14 & 05.06.2025 for AY 2014-15 respectively.
& 2157/Chny/2025 (AYs 2013-14 & 2014-15) M/s. Bharat Textiles & Proofing Industries Ltd. :: 2 ::
At the outset, the Ld.AR of the assessee drawing our attention against the impugned action of the CPC passed dated 11.11.2016 passed u/s.200A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) [for AY 2013-14]; and impugned CPC order passed on 21.11.2016 u/s.200A for AY 2014-15, submitted that the CPC has ordered levy of late fees u/s.234 of the Act ₹1,17,030/- & ₹32,050/- for the respective AY’s, which action is legally unsustainable, on the ground that the authorities/CPC didn’t enjoy the power to levy of late fee for the relevant years under consideration i.e. AY 2013-14 & 2014-15. And for such a proposition, he drew our attention to the binding decision of the Hon’ble jurisdictional High Court in the case of M/s. Sri Rujula International in WP No.4307 of 2024 dated 12.09.2024, wherein similar issue had come up for consideration, and the same was answered in favour of the assessee by observing as under:
In the present case, the respondent had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015. Therefore, in the absence of any provisions under Section 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside.
& 2157/Chny/2025 (AYs 2013-14 & 2014-15) M/s. Bharat Textiles & Proofing Industries Ltd. :: 3 ::
In the light of the Hon’ble Madras High Court’s order, the Ld.AR prayed that the action of the CPC levying late fees u/s.234E of the Act is void and therefore liable to be set aside.
4. Per contra, the Ld.DR vehemently opposed the plea of the assessee and doesn’t want us to interfere with the action of the Ld.CIT(A).
Aggrieved, the assessee is in appeal before this Tribunal.
We have heard both the parties and perused the material available on record, we note that the issue raised before us is whether the late fees can be imposed u/s.234E of the Act while processing the statement of TDS u/s.200A of the Act for the subject assessment years. In this regard, we find that the issue is no longer res-integra and find that the Hon’ble jurisdictional High Court in the case of M/s. Sri Rujula International (supra) has answered in favour of assessee by finding that Section 200A of the Act was inserted only with effect from 01.06.2015 and therefore, in the absence of any provisions under Section 200A of the Act for the relevant years, it was held that Income Tax Authorities ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, the Hon’ble Court held that the impugned Demand Intimation Letters are liable to be set aside.
& 2157/Chny/2025 (AYs 2013-14 & 2014-15) M/s. Bharat Textiles & Proofing Industries Ltd. :: 4 ::
In the light of the aforesaid discussion, the impugned action of the CPC levying late fees u/s.234E of the Act is liable to be set aside and we order accordingly.