ITAT Pune Directs Recalculation of Late Filing Fee u/s 234E Only From 1 June 2015

The Income Tax Appellate Tribunal (ITAT) Pune held that where a TDS statement is filed after 1 June 2015, a fee under Section 234E of the Income Tax Act, 1961 can be levied only for the period beginning from 01/06/2015. The assessee is an individual claiming to be a Non-Resident Indian (NRI) and had purchased a flat from another NRI for a consideration of Rs.68 lakh on 23 April 2014. In compliance with the provisions relating to tax deduction at source, he deducted TDS at the applicable rate and deposited the same on 27 June 2014.

However, upon processing the statement under Sections 200A and 206CB of the Income Tax Act, the Central Processing Centre (TDS) imposed a late filing fee amounting to Rs.5.10 lakh under Section 234E. Aggrieved by which, the assessee preferred an appeal before the CIT(A), who upheld the action of the Central Processing Centre. The assessee thereafter approached the Tribunal.

The Tribunal observed that though the assessee had filed the TDS statement after a delay of 2,551 days, the statutory amendment brought by the Finance Act, 2015 with effect from 1 June 2015, which inserted clause (c) to Section 200A enabling the levy of a fee under Section 234E, has been held to be prospective.

The Tribunal relied on various decisions that referred to the same question of law and found the settled position in law, after which it set aside the order passed by the CIT(A) and restored the matter to the file of the Jurisdictional TDS Officer with a direction to recompute the late filing fee under Section 234E only for the period commencing from 1 June 2015 up to the date of filing of the relevant TDS statement. Accordingly, the appeal of the assessee was partly allowed for statistical purposes.