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Facts
The assessee filed multiple appeals challenging orders from CPC(TDS) related to the levy of late fees under Section 234E for various assessment years (2013-14, 2014-15, 2015-16). For one appeal (ITA No. 878/Del/2023), the CIT(A) confirmed the late fee on merits. For the other appeals, the CIT(A) dismissed them as time-barred without providing an adequate opportunity of hearing to the assessee.
Held
The Tribunal quashed the CIT(A)'s order in ITA No. 878/Del/2023, holding that late fees under Section 234E cannot be levied for periods prior to the effective date of Section 200A(1)(c) (i.e., before 01.06.2015). For the remaining appeals, the Tribunal restored them to the CIT(A) for fresh adjudication on merits, including the issue of limitation, after ensuring the assessee receives a proper opportunity of hearing.
Key Issues
1. Whether late fees under Section 234E can be levied retrospectively for assessment years prior to the effective date of Section 200A(1)(c). 2. Whether the CIT(A) erred in dismissing appeals as time-barred without providing adequate opportunity of hearing.
Sections Cited
Section 234E, Section 200A, Section 200A(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: SHRI SHAMIM YAHYA & SH. ANUBHAV SHARMA
challenged the impugned order of CPC(TDS) for the respective quarters for assessment years 2014-15, 2015-16 and 2013-14 respectively. A chart of details of the appeals is provided by Ld. AR and same is reproduced here below:
Heard and perused the record.
ATN Infratech Private Limited 7
On hearing Ld. Representatives, it came up that in the Ld.CIT(A) has passed the order on merits holding that the late fee has been rightly levied u/s 234E r.w.s. 200A of the Income Tax Act, 1961. However, in regard to remaining appeals the Ld.CIT(A) has not gone on merits and has primarily dismissed the appeals, considering them to be barred by limitation.
Ld. AR has pointed out that no opportunity of hearing was given with regard to the dismissal of appeal being barred by law.
Assessee has raised the following grounds and the grounds are common in remaining. The grounds in are reproduced below;
“That on facts and in law, the order passed by the Ld. Assessing Officer (AO) and the Ld. Commissioner of Income Tax (Appeals) [CIT(A)], are bad in law and void ab initio.
2. That on facts and in law, the CIT(A) has erred in not providing adequate opportunity of being heard, thereby violating the principle of natural justice. 3. (i) That on facts and in law, the CIT(A) has erred in holding the appeal belated, in spite of the subject matter being covered squarely by multitude of judgments. (ii) That without prejudice, the CIT(A) has erred in not condoning the genuine circumstances and reasons behind the delay in filing of appeal by the applicant, if any ATN Infratech Private Limited 8 4. That on facts and in law, the AO has erred in levying late fee under section 234E of the Act. 5. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence.” 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(l)(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 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 ATN Infratech Private Limited 9 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 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.)
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. Further, in the remaining appeals the Ld.CIT(A) has fallen in error in not giving an opportunity of hearing to the assessee to explain and justify the delay, if any, in challenging the impugned orders.
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Accordingly, we allow appeal in and quash the order of Ld.CIT(A). Further, the remaining appeals are restored to the files of Ld.CIT(A) to decide afresh on merits after giving an opportunity of hearing to the assessee with regard to question of limitation and taking into account the law relied by us for allowing the appeal in ITA No.878/Del/2023. In the result, these other appeals are allowed for statistical purposes.