SIDDHARTH AGARWAL,UDAIPUR vs. ACIT, CIRCLE-2, UDAIPUR
Facts
The assessee challenged the levy of fee under Section 234E and interest under Section 220 of the Income Tax Act, 1961, amounting to Rs. 44,616/-, sustained by the CIT(A). The levy was made via a rectification order under Section 154 for Assessment Year 2015-16, pertaining to TDS in Form 27Q for FY 2014-15, Quarter 4.
Held
The Tribunal held that the amendment to Section 200A, which enables the levy of fee under Section 234E, is prospective from June 1, 2015. Since the TDS in question related to a period prior to this date, the levy of fee and interest was without legal authority and therefore illegal and invalid. The Tribunal deleted the fee and interest.
Key Issues
The key legal issue was whether the levy of fee under Section 234E and interest under Section 220 was valid for a period prior to June 1, 2015, given the prospective application of the amendment to Section 200A.
Sections Cited
Section 234E, Section 220, Section 154, Section 200A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 647/Jodh/2024 (Assessment Year – 2015-16) Siddharth Agarwal Assistant Commissioner of 28, Polo Ground, Income Tax, CPC, TDS Udaipur - 313001 Udaipur PAN No. AKGPA 4183 N Assessee by Shri Shrawan Kumar Gupta, Advocate (Virtual) Revenue by Smt. Runi Pal – CIT-DR (Virtual) Date of Hearing 28.01.2026. Date of Pronouncement 17.02.2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of Ld. Commissioner of Income Tax, Appeal [hereinafter referred to as CIT(A)] Udaipur – 2 dated 10.06.2024 with respect to Assessment Year 2015-16 challenging therein the sustaining the levy of fee u/s 234A of the Act by the AO by view of rectification order dated 12.06.2022 passed u/s 154 of the Income Tax Act, 1961 amounting to Rs. 28,600/- and interest of Rs. 16,016/- totalling to Rs. 44,616/-, although the amended law was not applicable for the year under consideration because it was applicable only with effect from 01.06.2015.
ITA No. 647/Jodh/2024 Asst. Year: 2015-16 2 2. At the outset, the Ld. Counsel for the assessee submitted that the appellant assessee filed a rectification application u/s 154 of the Act before the ACIT, CPC-TDS, Vaishali Ghajiabad for TDS in Form 27Q for Financial Year 2014- 15 with respect to Quarter 4, subsequently rectification order was passed on 12.06.2020 determining late filing fee/penalty of Rs. 28,600/- u/s 234A and interest of Rs. 16,016/- u/s 220 of the Income Tax Act, 1961 which has been confirmed by Ld. CIT(A). Ignoring the fact that AO did not have power to change fee u/s 234E while processing TDS returns, and hence in absence of enabling provisions, levy of fee could not be deducted in the course of intimation issued u/s 200A prior to 01.06.2015. The Ld. AR prayed for deleting the fee and interest levied by the ACIT, CPC.
Ld. DR on the other hand relied on the impugned order.
Having heard both the sides and perusal of record, we find that the Ld. CIT(A) failed to appreciate the fact that levy of penalty u/s 234E in the intimation order passed u/s 200A for Assessment Year 2015-16 with respect to it, TDS statement filed in Form 24Q for Quarter 4 was not in violation of the amended law and, therefore, the said penalty and interest was ought to have been deleted by the authorities below.
ITA No. 647/Jodh/2024 Asst. Year: 2015-16 3 5. In the present case, admittedly, the TDS deducted was related to the period prior to the date of enactment of i.e. 01.06.2015. Hon’ble Karnatka High court in the case of Fatheraj Singvi Vs. Union of India, (2016) 73 taxman.com 252(Kar.) had laid down the proposition that the amendment to Section 200A is with effect from 01.06.2015 and applicable with prospective effect and hence it is not application for the period to 01.06.2015 and corresponding assessment years.
“Hon’ble Rajasthan High Court in the case of Dr. Vineet Kothari, J. Vs. DCIT in the case of Sree Ayyappa Educational Charitable Trust Vs. Deputy Commissioner of Income Tax & ANR. Writ Petition No. 618/2015 c/w Writ Petition No. 5831/2015 & 5990-6001/2015” concluded that in the amendment u/s 200A has come to effect on 01.06.2015 was held to be having prospective effect, no computation of fee for demand or intimation of fee u/s 234E could be made for TDS deducted for respective assessment years prior to 01.06.2015.
Following the Hon’ble Jurisdictional High Court judgment in the case of Sree Ayyappa Educational Charitable Trust (supra), we hold that since the impugned intimation give by the ACIT, CPC is in violation of Section 200A so far
ITA No. 647/Jodh/2024 Asst. Year: 2015-16 4 as the period prior to 01.06.2015 can be said as without any authority under Law and hence it is said to be as illegal and invalid.
Accordingly, the levy of fee of Rs. 28,600/- u/s 234E and interest of Rs. 16,016/- u/s 220 of the Income Tax Act are deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 17/02/2026.
Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 17/02/2026. Nimisha Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File
BY ORDER, (Asstt. Registrar), ITAT, Jodhpur
