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Facts
The assessee's appeal was against the order of the CIT(A) which dismissed their appeal ex parte. The primary issue concerned the levy of late fees under Section 234E of the Income Tax Act, 1961, for Assessment Year 2013-14 and 2014-15.
Held
The Tribunal noted that the late fee under Section 234E was levied based on an amendment to Section 200A(1) which came into effect from June 1, 2015. Therefore, no such fee could be charged for TDS deducted prior to this date. The Tribunal relied on previous decisions and a High Court ruling that confirmed the prospective nature of the amendment.
Key Issues
Whether the late fee under Section 234E of the Income Tax Act, 1961, was wrongly levied for TDS deducted before the amendment of Section 200A(1) on June 1, 2015.
Sections Cited
234E, 200A(1)
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PER PAWAN SINGH, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 10/03/2025 for the Assessment Year (AY) 2014–15. The assessee has raised following grounds of appeal:
1. On the facts and circumstances of the case and in law, the CIT(A) grossly erred in dismissing the appeal of the Appellant ex parte, without giving proper opportunity of hearing and without considering the facts and merits of the case, which makes the order of CIT(A) illegal and violative of principles of natural justice and accordingly liable to be set aside and the appeal of the Appellant deserves to be properly adjudicated on merits as per law and in the interest of justice.
2. On the facts and circumstances of the case and in law, the DCIT, CPC TDS grossly erred in levying and the CIT(A) grossly erred in confirming the levy of late fees of Rs.
60,700/- U/s 234E of the Income Tax Act, 1961. The late fees levied U/s 234E is illegal, bad in law, invalid and deserves to be cancelled accordingly to law. 3. The appellant craves leave to add, amend, alter, vary and / or withdraw any or all the above grounds of appeal with the kind permission of the Hon’ble Tribunal.”
2. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that this appeal relates to levy late fee of under section 234E in respect of quarter two of Assessment Year 2013–14. No such late fee could be charged prior to 01.06.2015 as clause (c) to section 200A(1) was inserted only from 01.06.2015. On similar set of fact in assessees group case, similar late fees for various quarters for A.Y. 2014–15 and 2015–16 were deleted in to 181/Nag/2019 dated 21.02.2020.
On the other hand, the learned Senior Departmental Representative (ld. DR) for the Revenue relied upon the order of ld. AO.
We have considered the rival submissions of both the parties and find that find that on similar set of facts similar levy of late fee was deleted by this Tribunal in in DIG Medical Composite Hospital CRPF Vs ACIT (TDS) in to 181/Nag/2019 dated 21.02.2020 by following the decision of its earlier decision in Rajyas Software Private Limited Vs ACIT (CPC-TDS) in ITA No. 208/Nag/2019. We further find that while deleting similar late fee our predecessor relied on the decision of Karnataka High Court in Fatheraj Singhvi Vs Union of India (73 taxmann.com 252 (Kant) wherein it was held that amendment in section 200A(1) came into effect only on 01.06.2015 with prospective effect and no computation of fee for the demand or the intimation for the fee under section 234E could be DIGP GC CRPF made for the TDS deducted prior to 01.06.2015. thus, we find that the grounds of appeal
raised by the assessee are covered in favor of the assessee.