IN THE INCOME TAX APPELLATE TRIBUNAL, “A” BENCH, CHENNAI
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER

ITA Nos.1019, 1020& 1021/Mds/2015
Assessment Year : 2013-14
Date of the Order: 10-07-2015

Smt. G. Indhirani, Salem (Appellant)  Vs. The Deputy Commissioner of Income Tax, CPC-TDS, TDS- CPC, Ghaziabad (Respondent)

Apart from the above, ITA No. 1089, 1090, 1091 and 1092 of 2015 have also been considered jointly in this judgment.

Dispute:
The only issue for consideration was with regard to levy of fee under Section 234E of the Income-tax Act, 1961.

Argument(s):
It was argued that with effect from 01.06.2015, the Parliament by way of amendment to Section 200A of the Act empowered the Assessing Officer to levy fee under Section 234E of the Act while processing under Section 200A of the Act. Therefore prior  to  01.06.2015, the Assessing Officer had no authority to levy fee, if any, under Section 234E of the Act. Referring to the decision of Amritsar Bench of this Tribunal in I.T.A. No.90/Asr/2015 dated 09.06.2015, it was pointed out that prior to 01.06.2015, there was no enabling provision in Section 200A for raising a demand in respect of levy of fee under Section 234E of the Act.

On the contrary, the Income Tax Department contended that Section 234E of the Act provides for payment of fee, if the assessee fails to deliver the statement as prescribed in Section 200(3) of the Act. Therefore, the Assessing Officer has every authority to levy fee either by a separate order or while processing the statement under Section 200A of the Act.

Decision:
The Tribunal allowed the appeals holding that the Assessing Officer had exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. However, it was clarified that it is open to the Assessing Officer to pass a separate order under Section 234E levying fee provided the limitation for such a levy has not expire.d

Important Excerpts from the Order:

The Assessing Officer cannot make any adjustment other than the one prescribed above in Section 200A of the Act. By Finance Act, 2015, with effect from 01.06.2015, the Parliament amended Section 200A by substituting sub-section (1) of clauses (c) to (e).

Therefore, it is obvious that prior to 01.06.2015, there was no enabling provision in Section 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fee under Section 234E of the Act with effect from 01.06.2015. Therefore, as rightly submitted by the Ld.counsel for the assessees, while processing statement under Section 200A of the Act, the Assessing Officer cannot make any adjustment by levying fee under Section 234E prior to 01.06.2015. In the case before us, the Assessing Officer levied fee under Section 234E of the Act while processing the statement of tax deducted at source under Section 200A of the Act. Therefore, this Tribunal is of the considered opinion that the fee levied by the Assessing Officer under Section 234E of the Act while processing the statement of tax deducted at source is beyond the scope of adjustment provided under Section 200A of the Act. Therefore, such adjustment cannot stand in the eye of law.

The next contention of the assessee is that Section 234E of the Act says that the assessee “shall be liable to pay” by way of fee, therefore, the assessee has to voluntarily pay the fee and the Assessing Officer has no authority to levy fee. The argument of the Ld.counsel for the assessee is very attractive and  fanciful. However, we do not find any substance in that argument. When Section 234E clearly says that the assessee is liable to pay fee for the delay in delivery of the statement with regard to tax deducted at source, the assessee shall pay the fee as provided under Section 234E(1) of the Act before delivery of the statement under Section 200(3) of the Act. If the assessee fails to pay the fee for the periods of delay, then the assessing authority has all the powers to levy fee while processing the statement under Section 200A of the Act by making adjustment after 01.06.2015. However, prior to 01.06.2015, the Assessing Officer had every authority to pass an order separately levying fee under Section 234E of the Act. What is not permissible is that levy of fee under Section 234E of the Act while processing the statement of tax deducted at source and making adjustment before 01.06.2015. It does not mean that the Assessing Officer cannot pass a separate order under Section 234E of the Act levying fee for the delay in filing the statement as required under Section 200(3) of the Act.

In view of the above discussion, this Tribunal is of the considered opinion that the Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a separate order under Section 234E of the Act levying fee provided the limitation for such a levy has not expired. Accordingly, the intimation under Section 200A as confirmed by the CIT(Appeals) in sofar as levy of fee under Section 234E is set aside and fee levied is deleted. However, the  other  adjustment made  by the Assessing Officer in the impugned intimation shall stand as such.

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Related Updates:
ITAT Amritsar Order dated 09-06-2015 on Levy of 234E Click Here >>