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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This appeal has been filed by the assessee against the order of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 22.12.2022 in respect of AY 2013-14 challenging therein the levy of late fee of Rs. 12,595/- u/s 234E of the Income Tax Act for the returns filed prior to Iqbal Memorial Trust v. ITO 01.06.2015. There was a delay of six days in filing the appeal on account of delay in delivery of the appeal by the Postal Law Authority which beyond the control of the assessee. He stated that the appeal was sent by speed post on 26th December, 2022 well before the due date for filing of the appeal that was 29th December, 2022. The assessee has enclosed an endorsement of the Postal Authority in proof of the dispatch of the appeal set vide counter No. 1 dated 27.02.2023 at 14.41 pm. In view of that matter, we hold that the reasons given by the assessee are well beyond its control, and therefore, the delay is hereby condoned. Appeal is allowed to be heard on merits.
The counsel submitted that the appellant assessee is a charitable society registration u/s 12A of the Income Tax Act where the ld. AO has levied late fee of Rs.12,595/- for filing of TDS return late in respect of financial year 2012-13 under consideration. The counsel explained that the AO has stated in his order passed u/s 154 that is not empowered to determine the similarity of facts of the case which Sibia Health Care Pvt. Ltd. v. Dy. CIT(TDS), the judgment of ITAT, Amritsar Bench to grant waiver of late fee. Although, the late fee in filing of TDS prior to 01.06.2015 was illegal and hence it is liable to be deleted. The counsel contended that the assessee’s matter pertains to financial year 2012-13 much earlier levying of Iqbal Memorial Trust v. ITO late fee was passed on 02.05.2015 by the AO in contravention to the provisions of section 234E and the judgment delivered by co-ordinate Bench of ITAT Amritsar in the case of Sibia Health Care Pvt. Ltd. v. Dy. CIT (TDS) (supra). He pleaded that the impugned order confirming the levy of late fee may be annulled.
Per contra, the ld. DR supported the order of the ld. CIT(A), however, he failed to rebut the contention raised by the ld. AR for the appellant assessee.
We have heard the rival contention, perused the material on record and the impugned order, and the citation and judgment of the ITAT Amritsar Bench. Admittedly, it is admitted fact on record that the assessee has filed TDS return in respect of financial year 2012-13 much earlier to the amendment brought in the Act dated 01.06.2015 for levy of late fee u/s 234E of the Act. The ld. CIT(A) has admitted the fact that the matter of the appellant assessee is covered by the ITAT Bench decision in the case of Sibia Health Care Pvt. Ltd. Dy. CIT (TDS) (supra), however, we hold that there is no jurisdiction of jurisdictional High Court in favour of the appellant and hence he has confirmed the levy of penalty. The relevant para of the ITAT Amritsar order in the case of Sibia Health Care Pvt. Ltd. v. Dy. CIT (TDS) is reproduced hereunder:
Iqbal Memorial Trust v. ITO In effect thus, post 1st June 2015, in the course of processing of a TDS “8. statement and issuance of intimation under section 200A in respect thereof, an adjustment could also be made in respect of the “fee, if any, shall be computed in accordance with the provisions of section 234E”. There is no dispute that what is impugned in appeal before us is the intimation under section 200A of the Act, as stated in so many words in the impugned intimation itself, and, as the law stood, prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E. While examining the correctness of the intimation under section 200A, we have to be guided by the limited mandate of Section 200A, which, at the relevant point of time, permitted computation of amount recoverable from, or payable to, the tax deductor after making the following adjustments:
(a) after making adjustment on account of “arithmetical errors” and “incorrect claims apparent from any information in the statement” Section 200A(1)(a) (b) after making adjustment for ‘interest, if any, computed on the basis of sums deductible as computed in the statement”. Section 200A(1)(b) 9. No other adjustments in the amount refundable to, or recoverable from, the tax deductor, were permissible in accordance with the law as it existed at that point of time.
In view of the above discussions, in our considered view, the adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. This intimation is an appealable order under section 246A(a), and, therefore, the CIT(A) ought to have examined legality of the adjustment made under this intimation in the light of the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at Iqbal Memorial Trust v. ITO this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act. The assessee gets the relief accordingly.”
The following co-ordinate Bench decision, on parity of facts, the levy of late fee at Rs.12,595/- u/s 234E is hereby deleted.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 17.05.2023