By TIOL News Service

VIZAG, MAR 08, 2017: THE issue is - Whether AO can levy late fee u/s 234E for belated filing of TDS statements u/s 200(3), if the TDS returns has been filed and processed by the Central Processing Unit before June 01, 2015. NO is the answer.

Facts of the case:

The assessee filed quarterly e-TDS returns in prescribed forms for the respective quarters in respect of tax deducted at source under various TDS provisions of the Act. These quarterly returns were filed belatedly after the due date specified u/s 200(3) of the Act and Rule 31A of the Income Tax Rules, 1962. These quarterly returns were processed by the TDS, CPC and intimation u/s 200A was issued demanding late filing fee payable u/s 234E. On appeal, the CIT(A) held that the provisions of section 234E being the machinery section are applicable for levy of late fee for belated filing of TDS statements even before insertion of sub-clause (c) in section 200A of the Act, by the Finance Act 2015, w.e.f. 1.6.2015.

On appeal, the ITAT held that,

++ there is no enabling provision in section 200A of the Act, before insertion of subclause (c) into section 200A of the Act, by the Finance Act, 2015 w.e.f. 1.6.2015 and hence, no adjustments can be made towards late fee payable u/s 234E of the Act, for belated filing of TDS statements u/s 200(3) of the Act, while issuing intimation u/s 200A of the Act, for processing TDS statements filed and processed for the assessment years prior to 1.6.2015. Admittedly all the TDS returns has been filed and processed by the TDS, CPC before 1.6.2015. Therefore, fee payable u/s 234E of the Act, cannot be levied while processing TDS statements u/s 200A of the Act. CIT(A), without appreciating the facts simply upheld the action of the A.O. in levying late fee u/s 234E of the Act. Hence, A.O. directed to delete additions made towards late fee u/s 234E of the Act.

(See 2017-TIOL-263-ITAT-VIZAG)