Chronicle Publication Pvt Ltd, New Delhi vs ACIT (CPC)-TDS, New Delhi – Late Filing Fee Under Section 234E for AY 2014-15

Chronicle Publication Pvt Ltd, New Delhi vs ACIT (CPC)-TDS, New Delhi

Case Number: ITA 6320/DEL/2019

Assessment Year: 2014-15 (26 Q1)

Date of Order: 31st August 2020

Order Type: Final Tribunal Order

Court: Income Tax Appellate Tribunal, Delhi Bench ‘A’

Judges: Ms. Sushma Chowla (Vice President) and Dr. B.R.R. Kumar (Accountant Member)

Appellant: Chronicle Publication Pvt Ltd, New Delhi

Respondent: ACIT (CPC)-TDS, New Delhi

Case Filed On: 26th July 2019

Pronouncement Date: 31st August 2020

Background: The appellant, Chronicle Publication Pvt Ltd, filed an appeal against the order of the ACIT (CPC)-TDS, New Delhi, for the assessment year 2014-15, Quarter 1. The case revolves around the imposition of a late filing fee under Section 234E of the Income Tax Act, 1961, for delays in filing TDS statements.

Key Issues

The main issue in this case was whether the late filing fee under Section 234E could be levied on TDS statements filed for the period before 1st June 2015, particularly when the processing of such statements occurred after this date.

Arguments by the Appellant

The appellant contended that the late fee under Section 234E should not be imposed for TDS statements filed before 1st June 2015. The appellant argued that Section 200A of the Income Tax Act, which allows for the computation of late fees under Section 234E, was amended by the Finance Act 2015, effective from 1st June 2015. Thus, any TDS returns processed before this date should not attract a late fee.

Arguments by the Respondent

The Revenue argued that the levy of late fees under Section 234E was valid even for TDS statements filed before 1st June 2015, as the amendment was procedural and intended to clarify the law. The Respondent cited several high court decisions supporting the imposition of late fees for periods prior to the amendment.

Tribunal’s Findings

The tribunal extensively reviewed the arguments and relevant case laws. It noted that the Karnataka High Court in the case of Fateh Raj Singhvi & Ors vs UOI held that the amendment to Section 200A was prospective and did not apply to TDS returns filed before 1st June 2015. The Delhi Bench of the ITAT had consistently followed this reasoning in similar cases.

Furthermore, the tribunal pointed out that the amendment made by the Finance Act 2015 was not clarificatory but rather a substantive change in the law. Therefore, the provisions of Section 234E could not be applied retrospectively.

Conclusion

The tribunal ruled in favor of the appellant, Chronicle Publication Pvt Ltd. It held that the late filing fee under Section 234E was not leviable for the TDS statement filed for Q1 of the assessment year 2014-15, as the processing of these statements occurred before the amendment’s effective date of 1st June 2015. The tribunal, therefore, set aside the intimation issued under Section 200A and deleted the demand for the late fee.

This judgment reinforces the principle that amendments to tax laws that introduce new obligations or penalties cannot be applied retrospectively unless explicitly stated by the legislature. As a result, taxpayers who filed their TDS returns before the effective date of such amendments should not be subjected to penalties that were not legally enforceable at the time of filing.

Final Judgment: The appeal by Chronicle Publication Pvt Ltd was allowed, and the late fee demand was deleted.

This case underscores the importance of understanding the temporal scope of legislative amendments and the protection afforded to taxpayers from retroactive impositions that could lead to unjust penalties.

Chronicle Publication Pvt Ltd, New Delhi vs ACIT (CPC)-TDS, New Delhi – Late Filing Fee Under Section 234E for AY 2014-15