AVA SOFTWARE PRIVATE LTD,CHENNAI vs. CIT(A), CHENNAI

आदेश / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the

Commissioner of Income Tax (Appeals), National Faceless Appeal Centre,

Delhi, dated 24.05.2021 and pertains to assessment year 2014-15.

necessary petition for condonation of delay of 116 days explaining the

reasons for the delay has been filed. The learned counsel submitted that

assessee could not file appeal within the time allowed under the Act,

therefore delay may be condoned. Having heard both sides and considered

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the petition filed by the assessee for condonation of delay of 116 days, we

are of the considered view that reasons given by assessee for not filing the

appeal within the time allowed under the Act comes under reasonable cause

as provided under the Act for condonation of delay of 116 days and hence,

delay in filing of above appeal is condoned and appeal filed by the assessee

is admitted for adjudication.

assessee has filed TDS Quarterly returns in Form 26Q (on 31.01.2015 &

Form 24Q (on 24.12.2016) beyond due date specified under the Act. The

Assessing Officer has assessed TDS quarterly returns filed by the assessee

under section 200A and levied late filing fee under section 234E of the

Income Tax Act, 1961 [“Act” in short] for the delay in filing the said

statements for all the assessment year. The assessee has challenged the

levy of late filing fee under section 234E of the Act before the learned

CIT(A). After considering the submissions of the assessee, the ld. CIT(A)

dismissed the appeal.

record and gone through the orders of authorities below. The solitary issue

that needs to be resolved in the given facts and circumstances of the case

is whether the Assessing Officer can levy late fee prescribed under section

234E of the Act, when the quarterly return filed by the tax deductor for the

period prior to 01.06.2015, when the law has been amended by Finance

Act enabling the Assessing Officer to compute late fee while processing TDS

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returns under section 200A of the Act. The provisions of section 234E of

the Act, has been inserted to the statute by Finance Act with effect from

01.07.2012 and provides levy of late fee for belated filing of quarterly

return filed by the tax deductor. The Assessing Officer started levying of

late fee under section 234E of the Income Tax Act, 1961 while processing

quarterly TDS return and started issuing intimation to the assessees. The

issue has been challenged before various Courts by the assessees by Writ

and challenged the validity of provision of section 234E of the Act. In some

cases, some Courts have granted stay of operation of intimation issued by

the Department under section 200A of the Act. Therefore, on the basis of

judgement of the Hon’ble High Court, the assessees have started

challenging the intimation issued by the Assessing Officer before the ld.

CIT(A). The ld. CIT(A) did not entertain the appeal filed by the assessee on

both counts, including on limitation in filing the appeal as well as on merits

of the issue and rejected the arguments taken by the assessee and

confirmed late fee levied under section 234E of the Income Tax Act, as per

mandate of the statute. In the meantime, the Hon’ble Karnataka High Court

in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602

(Karnataka) had considered the issue and after analyzing the provisions of

section 234E of the Act and section 200A of the Act and held that in the

absence of enabling provision in section 200A of the Act, the Assessing

Officer cannot levy late fee under section 234E of the Act, while processing

the quarterly TDS return filed for the period of the respective assessment

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years prior to 01.06.2015. A similar view has been expressed by the

Hon’ble Kerala High Court in the case of Olari Little Flower Kuries (P.) Ltd.

v. Union of India [2022] 134 taxmann.com 111 (Kerala) after considering

the decision of Hon’ble Karnataka High Court in the case of Fatheraj Singhvi

v. Union of India [2016] 289 CTR 602 (Karnataka) and held that the

provisions of section 200A of the Act were mandated to enable computation

of late fee payable under section 234E of the Act, at the time of processing

of quarterly TDS return and the said amendment came into effect from

01.06.2015. Thus, the intimation issued by the Assessing Officer under

section 200A of the Act to levy late fee for belated return for the period

prior to 01.06.2015 is invalid. Subsequent to the decisions of the Hon’ble

Karnataka High Court and the Hon’ble Kerala High Court, series of decisions

have been rendered by various Benches of the Tribunal and held that late

fee under section 234E of the Act, cannot be levied for the period prior to

01.06.2015, because, there was no enabling provision to levy such late fee.

assessment year involved is prior to 01.06.2015. Therefore, we are of the

considered view that the late fee charged by the Assessing Officer under

section 234E of the Act, while processing quarterly TDS return under

section 200A of the Act, is without any authority and invalid. Hence, by

respectfully following the decision of the Hon’ble Karnataka High Court in

the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602

(Karnataka), we are of the considered view that the Assessing Officer

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cannot levy late fee while processing of TDS return under section 200A of

the Act up to the financial year 2013-14. Since, late fee charged in the

present case pertaining to the financial year 2013-14, we direct the

Assessing Officer to delete the late fee charged under section 234E of the

Act in the intimation issued under section 200A of the Act for the processing

of quarterly TDS return filed by the assessee.

Order pronounced on the 24th day of February, 2022, in Chennai.

Sd/- Sd/- (वी. दुगा� राव) (जी. मंजूनाथा) (G. MANJUNATHA) (V. DURGA RAO) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER चे�ई/Chennai, �दनांक/Dated: 24th February, 2022. TLN, Sr.PS आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 4. आयकर आयु�/CIT 2. ��यथ�/Respondent 5. िवभागीय �ितिनिध/DR 3. आयकर आयु� (अपील)/CIT(A) 6. गाड� फाईल/GF