Levy of late fee u/s 234E before 01.06.2015-the judgment in favour of assessee needs to be followed -ITAT

Levy of fee u/s 234E before 01.06.2015-in view of difference between High Courts, the one in favour of assessee needs to be followed where decision of Jurisdictional High Court is not in against-ITAT

ABCAUS Case Law Citation:
ABCAUS 2288 (2018) (04) ITAT

The assessee  had filed the instant appeal contending that the CIT(A) has erred in confirming the imposition of late filing fee, under section 234E despite there was no provision under section 200A for levy of late fee u/s 234E for the relevant period.

Thus the issue involved in this appeal was as to whether late filing fee u/s 234E of the Income Tax Act, 1961 (the Act) had rightly been charged in the intimation issued u/s 200A of the Act while processing the TDS returns/statement.

The enabling clause (c) had been inserted in the section 234E w.e.f. 01.06.2015. Before 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E.

As such, the assessee contended that in respect of TDS statement filed for a period prior to 01.06.2015, no late fee could be levied in the intimation issued u/s 200A of the Act.  

The Tribunal observed that the CIT(A), while deciding the matter against the assessee, had placed reliance on the judgment of the Hon’ble Gujarat High Court wherein, it had been held that section 200A of the Act was a machinery provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments. The CIT(A) held that this decision was delivered after considering numerous ITAT/High Court decisions and so, it holds the field.

The Tribunal opined that the view taken by the CIT(A) was not correct in law. As against the judgment of the Gujarat High Court, Kerala High Court as also admitted by the CIT(A) himself, decided the issue in favour of the assessee. The only objection of the CIT(A) was that the judgment of the Kerala High Court and others to the same effect had been taken into consideration by the Hon’ble Gujarat High Court while passing the judgment.

However the Tribunal opined that the CIT(A) had failed to take into consideration the settled law that where there is a cleavage of opinion between different High Courts on an issue, the one in favour of the assessee needs to be followed. It had so been held by the Hon’ble Supreme Court.  It was also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee.

Consequently, following the decision of the Hon’ble Kerala High Court and various Tribunals, the order under appeal was reversed and the levy of the fee u/s 234E was cancelled.  

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