CLASSIC MOTELS,DEHRADUN vs. ITO, WARD-1(1)(2), DEHRADUN

ORDER PER BRAJESH KUMAR SINGH, AM,

This appeal is against the order dated 28.03.2024 of the Addl./JCIT-1, Bangalore/First Appellate Authority (hereinafter referred to FAA) arising out of intimations u/s 200A of the Income Tax Act, 1961 (hereinafter referred to ‘the Act’) from CPC, TDS regarding levy of late fee u/s 234E of the Act as per the details mentioned on page no.2 of the order of the ld. FAA for AY 2014-15.

This is the appeal against the order passed allegedly u/s 201(1A) of the Income Tax Act, 1961 in the case of above named assessee. FACTS OF THE CASE:

1. 1. The return of TDS was filed late as the partner looking after tax matters was not attending business due to ill health 2. The late filing fees of Rs.1, 34,400/- and interest thereon of Rs.71,550/-was automatically charged u/s 234E while passing the order u/s 201(1A) of the Income Tax Act, 1961.

3. The order passed u/s 201(1A) electronically was never served upon the assessee. The assessee, on receipt of notice of demand, came to know about the order passed, immediately filed appeal.

4. The learned Joint Commissioner of Income Tax, Appeals-1, Bengaluru relying on the decision Rajesh Kourani 83 taxmann.com 137 of Gujarat High Court dismiss the appeal. Grounds of appeal

1. There is no inherent power with learned assessing officer to process TDS returns u/s 200A to levy TDS late fees u/s 234E upto 31.05.2015. The amendment in section 201(1A) came w.e.f. 1.6.2015 and the returns submitted/processed prior to this date are not subject to imposition of late filing fees. Such powers are absent in said section.

2. Reliance is placed on following cases wherein it has been held that charging of late filing fees u/s 234E of the Income Tax Act, 1961 in the order passed u/s 201(1A) is invalid and is uncalled for. i) Sibia Healthcare (P) Ltd. is DCIT(TDS) dated 9.6.2015. ii) Dhanlaxmi Developers Vs. DCIT ITA No.2888 to 2891/Ahmd/ 2015. iii) Tanish Industries (P) Ltd. vs. DCIT- ITANo.2296/Ahd./2015 iv) Perfect Cropscience Pvt Ltd vs DCIT, ITA No.2963/Ahd/2015 v) Fatehraj Singhvi & Ors. vs. UOI & Ors. 2016 (9) TMI 964 3. The adjustment in respect of levy of fees u/s 234E is indeed beyond the scope of permissible adjustments contemplated u/s 201(1)A.

4. In the absence of the enabling provisions u/s 201(1A) no levy of late filing fees can be effected.

5. The intimation u/s 201(1A) raising a demand against the tax deductor can only be passed within one year from end of the financial year within which the related TDS statement is filed. 6. The learned Commissioner of Income Tax (Appeals), Dehradun in appeal no. 10241/CIT(A)/DDN/17-18 of ESKAY EDUCATIONAL TRUST for assessment year 2013-14 has deleted the late filing fees charged u/s 234E vide order dated 24.10.2018. Copy of the said order is attached. 7. Further, ITAT, Dehradun Bench in the case of Om Prakash & Sons, where facts of the case are identical as that of appellant has held, vide order dated 29.04.2022, that fees charged u/s 234E before 01.06.2015 is not sustainable. Copy of order is attached. 8. Reliance is also placed on the decision of Supreme Court in the case of Vegetable Products Ltd. 88 ITR 192 (sc) where it was held that when there are conflicting decisions the decision taken in favour of the assessee should be followed. 9. Without further prejudice to above, the Kerala High Court in the case of Olari Little Flower Kuries (P) Ltd. Vs Union of India(2022) 134 taxman.com 111(Ker.), (2022) 440 ITR 26 (Ker.) after considering both the decisions of Gujrat High Court and Bengaluru High Court decided the matter in fevour of the assessee and deleted the fees charged u/s 234E. This has rest at peace the decision of Gujrat High Court. The learned Joint Commissioner of Income Tax, Appeals-1, Bengaluru has therefore erred in following the decision of Gurjat High Court. In view of above submissions, it is humbly prayed that late filing fees of TDS returns wrongly charged u/s 234E of the Income Tax Act, 1961 may please be deleted and appeal may please be allowed.” 3. We have considered the facts of the case. On similar facts, the Co- ordinate Bench of Tribunal Dehradun Bench in the case of Om Prakash & Sons vs ITO (TDS), Dehradun in to 99/DDN/2019, has held that amendments brought in the statute in section 200A by insertion of sub-clause (c) w.e.f. 01.06.2015 are prospective in nature and as such, notices issued u/s 200A of the Act for computation and intimation of payment of late filing fee u/s 234E of the Act relating to the period of tax deduction prior to 01.06.2015 was not maintainable. Similar view has been taken by Hon’ble Kerala High Court in the case of Olari Little Flower Kuries (P) Ltd. Vs Union of India(2022) 134 taxman.com 111(Ker.). Therefore, respectfully following the above decisions, the levy of late fee u/s 234E of the Act amounting to Rs.2,05,950/- for AY 2014-15 which is prior to 01.06.2015 is not sustainable and the same is deleted.

Order pronounced in the open court on 30th April, 2025.