2020 (6) TMI 710 - AT - Income Tax

Levying fee u/s 234E - Late filing of TDS returns / statement - statement processed u/s 200A - Scope of amendment - as stated to assessee this is the final opportunity to the assessee to clear the outstanding demand failing which coercive measure for recovery will be undertaken - HELD THAT - There is no reference regarding the date of the order passed by the AO and whether the same was served on the assessee. The assessee has also strongly submitted before us that no such order has been served on the assessee either in the physical format or through email and learned DR of the Revenue also could not provide any evidence regarding service of the order on the assessee. We therefore feel it proper that the appeals filed by the assessee before CIT(A) regarding these outstanding demands intimated to the assessee by the AO as per this letter dated 26.11.2018 should be considered as valid appeals and we proceed to decide these appeals on merit. This is true that before 01.06.2015 demand in respect of fees under section 234E cannot be raised under section 200A of the Income Tax Act 1961. The Assessment Year involved in the present appeals are Assessment Years 2013-14 to 2015-16. Hence these demands are for periods prior to 01.06.2015 and therefore not sustainable and hence we delete these demands. This view of us is fortified by the judgment in the case of Sri Fatehraj Singhvi vs. CIT 2016 (9) TMI 964 - KARNATAKA HIGH COURT - Decided in favour of assessee.

Summary

Issues:
Appeals against combined order of CIT(A) for Assessment Years 2013-14 to 2015-16 regarding the levy of penalty/fee under section 234E prior to 01-06-2015.

Analysis:

Issue 1: Levy of Penalty/Fee under Section 234E
The assessee raised three common grounds challenging the levy of penalty/fee under section 234E for the assessment years 2013-14 to 2015-16. The assessee relied on judgments by the High Court of Karnataka and ITAT Amritsar, which held that no penalty/fee can be levied under section 234E for periods prior to 01-06-2015 when the new clause (c) was inserted. The AR of the assessee argued that the demand raised for these years is not sustainable in law as it falls before the effective date of the amendment. The Revenue, however, supported the order of CIT(A) stating that the assessee failed to produce any order under section 200A challenged by them, making the appeals not maintainable. The Tribunal considered the submissions and noted that the demands in question were for periods before 01-06-2015, making them unsustainable. The Tribunal referenced the judgment of the Hon’ble Karnataka High Court to support its decision, emphasizing that demands for periods prior to 01-06-2015 are without authority under law.

Issue 2: Validity of Appeals
The Revenue contended that the appeals filed by the assessee were not maintainable as they did not produce the order under section 200A challenged by them. The AR of the assessee argued that no such order was served, and the first intimation of the outstanding demand was through a letter dated 26.11.2018. The Tribunal examined the letter and found no reference to the date of the order passed by the AO or proof of service to the assessee. As the Revenue could not provide evidence of service, the Tribunal considered the appeals valid and proceeded to decide on the merits. The Tribunal ultimately allowed the appeals, deleting the demands as they pertained to periods before 01-06-2015.

In conclusion, the Tribunal allowed the appeals of the assessee, holding that the demands for penalty/fee under section 234E for the assessment years 2013-14 to 2015-16, raised before 01-06-2015, were unsustainable. The Tribunal emphasized the lack of authority under law for such demands before the effective date of the relevant amendment. The Tribunal also validated the appeals filed by the assessee, as no evidence of service of the order under section 200A was provided by the Revenue, leading to the decision to consider the appeals on merit and ultimately ruling in favor of the assessee.