Brahmaputra Property Management Services Pvt. Ltd. vs. TDS CPC: Challenge Against Levy of Late Fee for 2013-14, 26Q

Brahmaputra Property Management Services Pvt. Ltd. vs. TDS CPC: Tribunal Ruling on Late Fee Levy

Case Number: ITA 6718/DEL/2019

Appellant: Brahmaputra Property Management Services Pvt. Ltd., New Delhi

Respondent: TDS CPC, Ghaziabad

Assessment Year: 2013-14, 26Q

Result: Appeal decided on 31st August 2020

Order Type: Final Tribunal Order

Date of Order: 31st August 2020

Background of the Case

The case revolves around the appellant, Brahmaputra Property Management Services Pvt. Ltd., challenging the levy of a late fee under Section 234E of the Income Tax Act for the assessment year 2013-14. The appellant argued against the fee imposed for delayed filing of TDS returns for the 26Q quarterly statement. This matter came to light when the appellant received an intimation from the TDS CPC, Ghaziabad, regarding the late fee.

Key Points of the Tribunal’s Decision

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, consisting of Shri R.K. Panda, Accountant Member, and Shri Sudhanshu Srivastava, Judicial Member, presided over this case. The appellant, represented by none, contested the validity of the late fee imposition under Section 234E before the amendments to Section 200A(1) of the Income Tax Act, which were introduced by the Finance Act, 2015, effective from 1st June 2015.

The respondent, represented by Ms. Rakhi Vimal, Senior Departmental Representative, argued that the late fee under Section 234E was justified even before the 2015 amendment, as the section was already in force from 1st July 2012.

Tribunal’s Analysis and Ruling

The Tribunal analyzed the legislative intent behind Section 234E and its relationship with Section 200A. The key contention was whether the Assessing Officer had the authority to levy a late fee under Section 234E for returns filed before the amendment date of 1st June 2015. The Tribunal noted that the Gujarat High Court in Rajesh Kourani vs. UOI upheld the validity of Section 234E, while the Karnataka High Court in Fatehraj Singhvi vs. UOI ruled against the retrospective application of the section.

The Tribunal emphasized that the charging provision under Section 234E was independent of the procedural aspects of Section 200A, which was later amended to facilitate the computation of the fee. The Tribunal concluded that since the returns in question were filed before 1st June 2015, the levy of a late fee under Section 234E could not be sustained.

Conclusion

Based on the analysis, the Tribunal set aside the late fee levied by the Assessing Officer under Section 234E for the assessment year 2013-14. The ruling clarified that the procedural amendments brought by the Finance Act, 2015, could not be applied retrospectively to impose fees for earlier periods.

The decision of the ITAT in favor of Brahmaputra Property Management Services Pvt. Ltd. provides significant clarity on the application of late fees under Section 234E for returns filed prior to the amendment in 2015.

This ruling highlights the importance of understanding the distinctions between charging provisions and procedural provisions within the Income Tax Act, as well as the implications of amendments on prior periods.

Brahmaputra Property Management Services Pvt. Ltd. vs. TDS CPC: Challenge Against Levy of Late Fee for 2013-14, 26Q